Yadkin Valley Financial Corporation, (NASDAQ: YAVY), the holding company for Yadkin Valley Bank and Trust Company, reports earnings of $3,637,101 for the quarter ended September 30, 2006, an increase of 23.9% as compared with earnings of $2,935,176 for the same quarter last year. Basic and diluted earnings per share were $0.34 and $0.27 for the quarters ended September 30, 2006 and 2005, respectively, an increase of 25.9%. Return on equity increased to 12.10% for the quarter ended September 30, 2006 from 10.07% for the quarter ended September 30, 2005, and return on tangible equity increased to 17.66% from 14.98% for the same periods.
Earnings for the nine months ended September 30, 2006 were $9,985,127, a 21.7% increase over the prior year. Year to date diluted earnings per share were $0.93 and $0.76, respectively, for September 30, 2006 and 2005, a 22.4% increase. Year to date basic earnings per share were $0.94 and $0.77 for the same periods. Return on equity increased to 11.25% for the nine-month period ended September 30, 2006 from 9.63% for the nine-month period ended September 30, 2005, and return on tangible equity increased to 16.50% from 14.44% for the same periods.
Total assets grew by $69.8 million (9.1% annualized) for the nine-month period ended September 30, 2006 and by $96.8 million (9.7%) since September 30, 2005. Deposit growth of $51.8 million (8.5% annualized) for the first nine months of 2006 was used to fund $40.4 million growth in net loans held for investment with the remainder being invested in securities and overnight funds. The net interest margin expanded to 4.48% in the first nine months of 2006 from 4.02% in the first nine months of 2005.
Commenting on the results, Bill Long, President and CEO, stated, "Our third quarter earnings of 34 cents per share reflected a strong increase of 7 cents over the third quarter 2005 and an increase of 2 cents over the second quarter 2006. Return on equity at 12.10% for the quarter continued to improve toward our goal of 15%. The earnings increase over the prior year was driven by margin expansion and noninterest income which together exceeded the additional costs of operating three branches that have opened during the last fourteen months. In our Piedmont region, the newest Mooresville branch that opened on Medical Park Drive in September 2005, has already grown to $15 million in deposits and $10 million in loans. In Watauga and Avery Counties, our High Country region has increased deposits by 17.9% since September 30, 2005. We're also excited about our continued growth in existing markets as well as entering new markets in our Yadkin Valley region. During October 2006 in Yadkinville, we have begun construction on a permanent building. In early 2007, we plan to open a branch in Pfafftown, located west of Winston-Salem in Forsyth County."
"Each of our three banking regions, our mortgage and securities brokerage subsidiaries, our operations group, and our administrative staff contributed to the growth in assets and profitablility while improving the efficiency ratio. To recognize the leadership of our board and hard work of our employees that allowed us to reach $1 billion in assets last year, we held a celebration on September 23rd in North Wilkesboro with a cookout, bluegrass music, and recreation for the children and a few adventurous adults."
"Our stock price improved following our second quarter report supported by meetings with analysts and investors since last year. The price reached a new twelve-month high at $16.15 during the quarter, and the average daily closing price was $15.31, up 8.4% over the average price in the third quarter of 2005. We reached another significant milestone with our first independent research as Ryan Beck & Company initiated coverage in their report released October 3, 2006."
Yadkin Valley Bank and Trust Company is a full service community bank providing services in twenty-three branches throughout its three regions in North Carolina. The Yadkin Valley Bank region serves Ashe, Surry, Wilkes, and Yadkin Counties. The Piedmont Bank region serves Iredell and Mecklenburg Counties. The High Country Bank region serves Avery and Watauga Counties. The Bank provides mortgage services through its subsidiary, Sidus Financial, LLC, acquired on October 1, 2004 and headquartered in Greenville, North Carolina. Securities brokerage services are provided by Main Street Investment Services, Inc., a Bank subsidiary with four offices located in the branch network.
This news release contains forward-looking statements. Such statements are subject to certain factors that may cause the Company's results to vary from those expected. These factors include changing economic and financial market conditions, competition, ability to execute our business plan, items already mentioned in this press release, and other factors described in our filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's judgment only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events and circumstances that arise after the date hereof.
Yadkin Valley Financial Corporation
(Amounts in thousands except per share data)
(unaudited)
For the Three Months Ended
Sept 30, Sept 30,
2006 2005
Net interest income $ 10,389 $ 8,799
Provision for loan losses 525 498
Other income 3,926 3,688
Other expenses 8,212 7,642
Income taxes 1,941 1,412
Net income 3,637 2,935
Income per share:
Basic $ 0.34 $ 0.27
Diluted $ 0.34 $ 0.27
For the Nine Months Ended
Sept 30, Sept 30,
2006 2005
Net interest income $ 30,497 $ 25,336
Provision for loan losses 1,640 1,262
Other income 10,558 9,848
Other expenses 24,040 21,759
Income taxes 5,390 3,957
Net income 9,985 8,205
Income per share:
Basic $ 0.94 $ 0.77
Diluted $ 0.93 $ 0.76
As of Sept. 30 As of Dec. 31,
2006 2005 *
Assets
Securities available for sale $128,485 $113,716
Gross loans held for investment 779,075 737,530
Allowance for loan losses (10,615) (9,474)
Loans held for sale 41,161 31,427
Goodwill 32,136 32,136
Core deposit intangible 5,235 5,851
Other Assets 118,642 113,108
Total Assets 1,094,119 1,024,294
Liabilities and Stockholders' Equity
Non-interest bearing deposits 148,246 135,912
NOW, savings, and money market 223,205 251,423
Time deposits over $100,000 207,643 170,574
Other time deposits 287,087 256,444
Other liabilities 106,349 93,618
Total Liabilities 972,530 907,971
Stockholders' equity 121,589 116,323
Total Liabilities and
Stockholders' Equity 1,094,119 1,024,294
Shares outstanding 10,610 10,680
*Note: Derived from audited financial statements
Yadkin Valley Financial Corporation
(unaudited)
For the Three Months Ended
Sept 30 Jun 30, Mar 30 Dec 31, Sept 30
2006 2006 2005 2005 2005
Per Share Data:
Basic Earnings per Share $ 0.34 $ 0.32 $ 0.27 $ 0.28 $ 0.27
Diluted Earnings per Share $ 0.34 $ 0.32 $ 0.27 $ 0.27 $ 0.27
Book Value per Share $ 11.46 $ 11.19 $ 11.04 $ 10.89 $ 10.80
Tangible Book Value per Share $ 7.94 $ 7.66 $ 7.49 $ 7.33 $ 7.27
Cash Dividends per Share $ 0.12 $ 0.12 $ 0.11 $ 0.11 $ 0.11
Selected Performance Ratios:
Return on Average Assets
(annualized) 1.36% 1.30% 1.18% 1.17% 1.17%
Return on Average Equity
(annualized) 12.10% 11.49% 10.06% 10.03% 10.07%
Return on Tangible Equity
(annualized) 17.66% 16.79% 14.82% 14.82% 14.98%
Net Interest Margin 4.43% 4.47% 4.55% 4.26% 4.04%
Net Interest Spread 3.79% 3.91% 4.09% 3.81% 3.64%
Noninterest Income as a % of
Revenue 28.47% 26.33% 26.61% 27.69% 30.76%
Noninterest Income as a % of
Average Assets 0.37% 0.33% 0.33% 0.34% 0.37%
Noninterest Expense as a % of
Average Assets 0.77% 0.75% 0.81% 0.78% 0.77%
Efficiency Ratio 55.35% 55.14% 59.37% 59.49% 58.94%
Asset Quality:
Nonperforming Loans (000s) 5,184 3,113 3,478 3,199 3,059
Nonperforming Assets(000s) 5,311 3,482 3,765 3,962 4,085
Nonperforming Loans to Total
Loans 0.63% 0.38% 0.44% 0.42% 0.40%
Nonperforming Assets to Total
Assets 0.49% 0.32% 0.36% 0.39% 0.41%
Allowance for Loan Losses to
Total Loans 1.29% 1.25% 1.27% 1.23% 1.23%
Allowance for Loan Losses to
Nonperforming Loans 2.05 3.30 2.87 2.96 3.04
Net Charge-offs to Average
Loans (annualized) 0.09% 0.12% 0.03% 0.15% 0.11%
Capital Ratios:
Equity to Total Assets 11.11% 11.03% 11.33% 11.36% 11.58%
Tangible Equity to Total
Tangible Assets 7.97% 7.82% 7.98% 7.94% 8.10%
Tier 1 leverage ratio 8.18% 8.17% 8.31% 8.19% 8.14%
Tier 1 risk-based ratio 9.38% 9.36% 9.49% 9.38% 9.45%
Total risk-based capital ratio 10.57% 10.52% 10.66% 10.51% 10.59%
For the Nine Months Ended
Sept Sept Sept
30, 30, 30,
2006 2005 2004
Selected Performance Ratios:
Return on Average Assets (annualized) 1.28% 1.13% 1.06%
Return on Average Equity (annualized) 11.25% 9.63% 8.77%
Return on Tangible Equity (annualized) 16.50% 14.44% 12.65%
Net Interest Margin 4.48% 4.02% 3.92%
Net Interest Spread 3.91% 3.66% 3.65%
Noninterest Income as a % of Revenue 26.79% 29.03% 23.86%
Noninterest Income as a % of Average Assets 1.01% 1.01% 0.75%
Noninterest Expense as a % of Average Assets 2.31% 2.24% 1.98%
Efficiency Ratio 56.41% 59.42% 56.74%
Asset Quality:
Net Charge-offs to Average Loans (annualized) 0.08% 0.11% 0.19%
Average Balance Sheets and Net Interest Income Analysis
(Dollars in Thousands)
(Unaudited)
Nine Months Ended:
September 30, 2006
----------------------------------
Average Yield/
Balance Interest Rate
----------- ----------- ----------
INTEREST EARNING ASSETS
Federal funds sold $ 3,674 $ 136 4.95%
Interest bearing deposits 2,270 71 4.18%
Investment securities (1) 122,725 4,173 4.55%
Total loans (1,2) 794,979 45,342 7.63%
----------- -----------
Total average earning assets
(1) 923,648 49,722 7.20%
-----------
Noninterest earning assets 118,669
-----------
Total average assets $ 1,042,317
===========
INTEREST BEARING LIABILITIES
NOW and money market $ 187,234 $ 2,792 1.99%
Savings 39,872 298 1.00%
Time certificates 456,409 13,842 4.05%
----------- -----------
Total interest bearing
deposits 683,515 16,932 3.31%
Repurchase agreements sold 30,573 650 2.84%
Borrowed funds 47,673 1,172 3.29%
----------- -----------
Total interest bearing
liabilities 761,761 18,754 3.29%
----------- -----------
Noninterest bearing deposits 146,012
Stockholders' equity 118,637
Other liabilities 15,907
-----------
Total average liabilities and
stockholders' equity $ 1,042,317
===========
NET INTEREST INCOME/
YIELD (3,4) $ 30,968 4.48%
===========
INTEREST SPREAD (5) 3.91%
(Unaudited)
Nine Months Ended: September 30, 2005
----------------------------------
Average Yield/
Balance Interest Rate
----------- ----------- ----------
INTEREST EARNING ASSETS
Federal funds sold $ 3,504 $ 80 3.05%
Interest bearing deposits 3,341 72 2.88%
Investment securities (1) 111,069 3,434 4.13%
Total loans (1,2) 735,195 35,284 6.42%
----------- -----------
Total average earning assets
(1) 853,109 38,870 6.09%
-----------
Noninterest earning assets 117,998
-----------
Total average assets $ 971,107
===========
INTEREST BEARING LIABILITIES
NOW and money market $ 210,503 $ 2,322 1.47%
Savings 43,811 353 1.08%
Time certificates 364,300 8,301 3.05%
----------- -----------
Total interest bearing
deposits 618,614 10,976 2.37%
Repurchase agreements sold 33,895 511 2.02%
Borrowed funds 72,222 1,699 3.15%
----------- -----------
Total interest bearing
liabilities 724,731 13,186 2.43%
----------- -----------
Noninterest bearing deposits 121,657
Stockholders' equity 113,885
Other liabilities 10,834
-----------
Total average liabilities and
stockholders' equity $ 971,107
===========
NET INTEREST INCOME/
YIELD (3,4) $ 25,684 4.02%
===========
INTEREST SPREAD (5) 3.66%
1. Yields related to securities and loans exempt from both Federal income
taxes are stated on a fully tax-equivalent basis, assuming a Federal
income tax rate of 34%, reduced by the nondeductible portion of
interest expense
2. The loan average includes loans on which accrual of interest has been
discontinued.
3. Net interest income is the difference between income from earning assets
and interest expense.
4. Net interest yield is net interest income divided by total average
earning assets.
5. Interest spread is the difference between the average interest rate
received on earning assets and the average rate paid on interest
bearing liabilities.
For additional information contact:
William A. Long, President and CEO
Edwin E. Laws, CFO
(336) 526-6312