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Contact: Jeffrey W. Farrar
Executive Vice President and CFO
(434) 964-2217
jfarrar@stellarone.com
STELLARONE CORPORATION
REPORTS 92% EARNINGS INCREASE TO $5.5 MILLION
Charlottesville, VA April 26, 2012 – StellarOne Corporation (NASDAQ: STEL) (“StellarOne”) today reported first quarter 2012 earnings of $5.5 million, or $0.24 net income per diluted common share. This represents a 92% increase over net income of $2.9 million or $0.11 per common diluted share recognized during the same quarter in the prior year.
“We are pleased to report a strong quarter to begin 2012, with continuing improvements in asset quality, solid non-interest income growth and reduced operating expenses. Net charge-offs improved to 0.35% of average loans compared to 0.86% in the last quarter, and nonperforming assets as a percentage of total assets improved to 1.52% compared to 1.64% last quarter. In addition, the first quarter saw marked improvement in operating expenses as compared to last quarter, reflecting an ongoing effort to improve our efficiency and profitability. We continue to see improving loan activity within the commercial loan portfolio, with C&I loans providing the strongest contribution at 5% growth over last quarter”, said O. R. Barham, Jr., President and Chief Executive Officer.
First quarter performance highlights included:
· | Net charge-offs decreased 58.8% or $2.6 million on a sequential basis and are down 60.6% or $2.8 million compared to the same period in the prior year. |
· | Nonperforming asset levels decreased 6.7% or $3.2 million on a sequential basis, lowering the ratio of non-performing assets as a percentage of total assets to 1.52% as of March 31, 2012, compared to 1.64% as of December 31, 2011. |
· | Net interest margin expanded 6 basis points sequentially to 3.85% in the first quarter of 2012 from 3.79% in the fourth quarter of 2011 due to reduced deposit costs and loans representing a higher percentage of average earning assets. |
· | Pre-tax, pre-provision earnings amounted to $8.5 million for the first quarter of 2012, an increase of $378 thousand or 4.7% compared to the fourth quarter of 2011, and an increase of $467 thousand or 5.8% compared to the same period in the prior year. |
Net Interest Margin Expands
The net interest margin was 3.85% for the first quarter of 2012, compared to 3.79% for the fourth quarter of 2011 and 3.85% for the first quarter of 2011. The average yield on earning assets for the current quarter increased slightly to 4.64% on a sequential basis as a result of loans representing a higher percentage of earning assets when compared to the preceding quarter. A 6 basis point improvement in the cost of interest bearing liabilities was noted sequentially, moving from 1.00% during the fourth quarter of 2011 to .94% during the first quarter of 2012. Both investment yields and loan yields contracted 13 basis points and 5 basis points, respectively, on a sequential basis. Investment yields continue to contract due to lower yields realized on the recent investment of excess liquidity in the current low rate environment. Loan yields continue to contract slightly due to re-pricing within the current portfolio and reduced yields on new production. Though margin improved, a decrease in earning assets resulted in a reduction in net interest income on a tax-equivalent basis which amounted to $24.6 million for the first quarter of 2012. This represents a decrease of $438 thousand from $25.1 in the fourth quarter of 2011, and essentially flat compared to the same period in the prior year. Net interest margin will likely compress moderately going forward as strategic options to continue lowering funding costs become more limited while yields continue to be pressured by pricing competition for quality loan opportunities, lower investment yields, and the flattening yield curve.
Operating Noninterest Income Increases on a Sequential Basis
On an operating basis, which excludes gains and losses from sales and impairments of securities and other assets, total non-interest income amounted to $8.1 million for the first quarter of 2012, up $197 thousand or 2.5% on a sequential basis compared to $7.9 million for the fourth quarter of 2011, and up $408 thousand or 5.3% compared to the same period in the prior year. Other income increased $592 thousand sequentially due to increases in pass through insurance and investment income. The $408 thousand increase in operating noninterest income when compared to the same period in the prior year stemmed from an increase in retail banking fees of $239 thousand and $119 thousand in mortgage banking-related fees, which were offset by a $220 thousand increase in losses/impairments on foreclosed assets.
Mortgage banking-related fees totaled $2.2 million for the first quarter of 2012, or down $439 thousand or 16.7% compared to $2.6 million for the fourth quarter of 2011 and up $119 thousand or 5.8% when compared to the same quarter in 2011. The decrease is primarily volume driven and not margin related as loans sold in the first quarter of 2012 totaled $97 million or down $27 million or 21.8% from the $124 million sold during the fourth quarter of 2011.
Retail banking fee income remained relatively flat at $3.8 million for the first quarter of 2012, a decrease of $81 thousand or 2.1% compared to $3.9 million for the fourth quarter of 2011. This minor decrease was attributable to a decrease of $150 thousand NSF revenue offset by an increase in interchange income of $58 thousand.
Wealth management revenues from trust and brokerage fees for the first quarter of 2012 were $1.3 million or up $284 thousand or 26.8% on a sequential quarter basis and flat compared to the first quarter of 2011. Fiduciary assets increased $19.1 million or 4.3% sequentially to $459.4 million, compared to $440.3 million at December 31, 2011.
Asset Quality and Coverage Ratios Improve
Non-performing assets totaled $44.5 million at March 31, 2012, down $3.2 million or 6.7% sequentially from $47.7 million at December 31, 2011 and down $7.7 million or 14.7% compared to $52.2 million at March 31, 2011. The ratio of non-performing assets as a percentage of total assets decreased to 1.52% as of March 31, 2012, compared to 1.64% as of December 31, 2011 and 1.80% at March 31, 2011.
Net charge-offs for the first quarter of 2012 totaled $1.8 million, down $2.6 million or 58.8% compared to the $4.4 million for the fourth quarter of 2011 and down $2.8 million or 60.6% when compared to $4.6 million for the first quarter of 2011. Annualized net charge-offs as a percentage of average loans receivable amounted to 0.35% for the first quarter of 2012, down from 0.86% for the fourth quarter of 2011 and down from 0.88% for the first quarter of 2011.
Foreclosed assets totaled $6.8 million at March 31, 2012, down $1.7 million or 20.3% compared to $8.6 million at December 31, 2011 and down $2.2 million or 24.3% compared to $9.0 million at March 31, 2011. Past due and matured loans between 30 and 89 days totaled $32.7 million at March 31, 2012, down $1.8 million or 5.2% compared to $34.5 million at December 31, 2011.
Included in the loan portfolio at March 31, 2012, are loans classified as troubled debt restructurings (“TDRs”) totaling $34.8 million or 1.7% of total loans. TDRs were reduced sequentially by 10.2% or $3.9 million as compared to $38.7 million at December 31, 2011. At March 31, 2012, $28.7 million or 82.5% of total TDRs represent residential consumer real estate loans under a mortgage modification program designed to help homeowners remain in their homes.
StellarOne recorded a provision for loan losses of $850 thousand for the first quarter of 2012, a decrease of $900 thousand compared to the $1.8 million recognized for the fourth quarter of 2011 and a decrease of $3.7 million compared to the first quarter of 2011. This decrease is reflective of the improvement in underlying credit quality metrics used in measuring the risk inherent in the loan portfolio. The allowance as a percentage of non-performing loans increased to 83.9% at March 31, 2012, from 83.2% at December 31, 2011. The first quarter 2012 provision compares to net charge-offs of $1.8 million, resulting in an allowance for loan losses of $31.6 million at March 31, 2012, a decrease of $973 thousand when compared to $32.6 million at December 31, 2011. The allowance as a percentage of total loans was 1.55% at March 31, 2012, compared to 1.60% at December 31, 2011.
Efficiency Ratio Decreases
The efficiency ratio was 69.77% for the first quarter of 2012, compared to 71.83% for the fourth quarter of 2011 and 71.20% for the same quarter in 2011. The sequential quarter decrease in the efficiency ratio reflects a 4.1% decrease in overhead offset by a 1.3% decrease in revenues.
The $1.0 million sequential quarter decrease in noninterest expense was driven by decreases of $391 thousand in compensation and benefits expense, $335 thousand in professional fees and $169 thousand in other operating expenses. The decrease in compensation and benefits is due to the reduction of 35 FTE’s since December 31, 2011 and the absence of nonrecurring items which occurred in the fourth quarter of 2011. Benefits from branch closings affected in the first quarter of 2012 along with the FTE reduction made during the quarter are expected to be fully realized in the coming quarters with estimated annualized cost savings of $1.0 million.
The decrease in the efficiency ratio relative to the same period in the prior year was largely driven by a 2.0% increase in net revenues, resulting from higher noninterest income driven by increased retail banking fees, mortgage revenues and elevated levels of pass through income reported in other operating income during the first quarter of 2012.
Effective Tax Rate
The provision for income taxes was $2.1 million for the first quarter of 2012 compared to $1.6 million for the fourth quarter of 2011. This produced an effective tax rate for the first quarter of 2012 of 27.8% compared to 24.7% for the prior quarter. The increase in the current quarter’s effective tax rate was primarily due to higher pre-tax earnings relative to permanent tax differences, which remained relatively flat.
Capital Ratios
Risk-based capital ratios continue to substantially exceed published regulatory standards for well-capitalized banks. The period-end tangible common equity ratio was 10.64% at March 31, 2012 compared to 10.52% at December, 2011. Tier 1 risk-based and total risk-based capital ratios were 15.47% and 16.73%, respectively, at March 31, 2012 compared to 15.17% and 16.42% at December 31, 2011. Shareholders’ equity represented 14.28% of total assets at March 31, 2012, while book value per common share was $18.28 per share.
Balance Sheet Remains Stable Sequentially
Period end loans increased $3.3 million, essentially flat compared to the fourth quarter of 2011, while average loans for the first quarter of 2012 were $2.05 billion, unchanged compared to the fourth quarter of 2011. While loan contraction has stabilized, soft demand, pricing competition for quality loans and increased curtailments continue to be obstacles we face while continuing our focus on growing the loan portfolio. Management has placed a primary focus on growing the commercial and industrial loan portfolio which grew sequentially by $9.6 million or 5.0%. Average securities were $461.2 million for the first quarter, down $5.3 million or 1.1% from $466.6 million for the fourth quarter of 2011, reflecting stability in the loan portfolio, decreases in interest bearing deposits and funding contractions on the liability side. Average deposits for the first quarter of 2012 were $2.40 billion or down $26 million or 1.1% on a sequential quarter basis compared to the fourth quarter of 2011. Average interest bearing deposits decreased sequentially by $22.9 million or 1.1%. At March 31, 2012, total period end assets were $2.93 billion, compared to $2.92 billion at December 31, 2011. Period end cash and cash equivalents were $85.2 million at March 31, 2012, a decrease of $14.8 million or 14.8% compared to $100.0 million at December 31, 2011.
About StellarOne
StellarOne Corporation is a traditional community bank, offering a full range of business and consumer banking services, including trust and wealth management services. Through the activities of our sole subsidiary, StellarOne Bank, we operate over 50 full-service financial centers, one loan production office, and over 60 ATMs serving the New River Valley, Roanoke Valley, Shenandoah Valley, and Central and North Central Virginia.
Earnings Webcast
To hear a live webcast of StellarOne’s first quarter 2012 earnings conference call at 10:00 a.m. (EDT) on April 26, 2012, please visit our website at www.StellarOne.com and click on the Investor Relations section for detailed instructions on how to participate. Replays of the conference call will be available from 1:00 p.m. (EDT) on Thursday, April 26, 2012 through 11:59 PM (EDT) on Thursday, May 3, 2012, by dialing toll free (855) 859 2056 and using passcode #68589331.
Non-GAAP Financial Measures
This report refers to the efficiency ratio, which is computed by calculating noninterest expense less amortization of intangibles and foreclosed asset expense and goodwill impairments and dividing this by the sum of net interest income on a tax equivalent basis and non-interest income excluding gains on securities and losses on foreclosed assets. The report also refers to operating earnings, which reflects net income adjusted for non-recurring expenses associated with mergers, asset gains and losses or expenses that are unusual in nature. Comparison of our efficiency ratio and operating earnings with those of other companies may not be possible because other companies may calculate them differently. Pre-tax, pre-provision earnings, which adds back provision and tax expense to net income, is used to demonstrate a more representative comparison of operational performance without the volatility of credit quality that is typically present in times of economic stress. The tangible common equity ratio is used by management to assess the quality of capital and management believes that investors may find it useful in their analysis of the company. This capital measure is not necessarily comparable to similar capital measures that may be presented by other companies. Such information is not in accordance with generally accepted accounting principles in the United States (“GAAP”) and should not be construed as such. These are non-GAAP financial measures that management believes provide investors with important information regarding operational efficiency. Management believes such financial information is meaningful to the reader in understanding operating performance, but cautions that such information should not be viewed as a substitute for GAAP. StellarOne, in referring to its net income, is referring to income under GAAP.
Forward-Looking Statements
In addition to historical information, this press release contains forward-looking statements. The forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results, or those anticipated. When we use words such as “believes,” “expects,” “anticipates” or similar expressions, we are making forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date thereof. StellarOne wishes to caution the reader that factors, such as those listed below, in some cases have affected and could affect StellarOne’s actual results, causing actual results to differ materially from those in any forward-looking statement. These factors include: (i) expected cost savings from StellarOne’s acquisitions and dispositions, (ii) competitive pressure in the banking industry or in StellarOne’s markets may increase significantly, (iii) changes in the interest rate environment may reduce margins, (iv) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, credit quality deterioration, (v) changes may occur in banking legislation and regulation, (vi) changes may occur in general business conditions, and (vii) changes may occur in the securities markets, Please refer to StellarOne’s filings with the Securities and Exchange Commission for additional information, which may be accessed at www.StellarOne.com.
NOTE: Risk-based capital ratios are preliminary.
STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||
SELECTED FINANCIAL DATA (UNAUDITED) | ||||||||
(Dollars in thousands, except per share data) | ||||||||
SUMMARY INCOME STATEMENT | Three Months Ended March 31, | |||||||
2012 | 2011 | |||||||
Interest income - taxable equivalent | $ | 29,684 | $ | 31,019 | ||||
Interest expense | 5,062 | 6,443 | ||||||
Net interest income - taxable equivalent | 24,622 | 24,576 | ||||||
Less: taxable equivalent adjustment | 726 | 713 | ||||||
Net interest income | 23,896 | 23,863 | ||||||
Provision for loan and lease losses | 850 | 4,500 | ||||||
Net interest income after provision for loan and lease losses | 23,046 | 19,363 | ||||||
Noninterest income | 8,125 | 7,670 | ||||||
Noninterest expense | 23,557 | 23,536 | ||||||
Income tax expense | 2,114 | 626 | ||||||
Net income | 5,500 | 2,871 | ||||||
Dividends and accretion on preferred stock | - | (465 | ) | |||||
Net income available to common shareholders | $ | 5,500 | $ | 2,406 | ||||
Earnings per share available to common shareholders | ||||||||
Basic | $ | 0.24 | $ | 0.11 | ||||
Diluted | $ | 0.24 | $ | 0.11 | ||||
SUMMARY AVERAGE BALANCE SHEET | Three Months Ended March 31, | |||||||
2012 | 2011 | |||||||
Total loans | $ | 2,054,830 | $ | 2,104,031 | ||||
Total investment securities | 461,236 | 359,027 | ||||||
Total earning assets | 2,575,389 | 2,591,490 | ||||||
Total assets | 2,897,624 | 2,910,242 | ||||||
Total deposits | 2,373,887 | 2,358,546 | ||||||
Shareholders' equity | 416,998 | 427,732 | ||||||
PERFORMANCE RATIOS | Three Months Ended March 31, | |||||||
2012 | 2011 | |||||||
Return on average assets | 0.76 | % | 0.40 | % | ||||
Return on average equity | 5.30 | % | 2.72 | % | ||||
Return on average realized equity (A) | 5.45 | % | 2.75 | % | ||||
Net interest margin (taxable equivalent) | 3.85 | % | 3.85 | % | ||||
Efficiency (taxable equivalent) (B) | 69.77 | % | 71.20 | % | ||||
CAPITAL MANAGEMENT | March 31, | |||||||
2012 | 2011 | |||||||
Tier 1 risk-based capital ratio | 15.47 | % | 16.14 | % | ||||
Tangible equity ratio | 10.64 | % | 11.12 | % | ||||
Tangible common equity ratio | 10.64 | % | 10.03 | % | ||||
Period end shares issued and outstanding | 22,858,900 | 22,775,733 | ||||||
Book value per common share | $ | 18.28 | $ | 17.51 | ||||
Tangible book value per common share | $ | 13.06 | $ | 12.25 | ||||
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
Shares issued | 59,208 | 27,671 | ||||||
Average common shares issued and outstanding | 23,064,048 | 22,835,761 | ||||||
Average diluted common shares issued and outstanding | 23,064,164 | 22,847,433 | ||||||
Cash dividends paid per common share | $ | 0.06 | $ | 0.04 | ||||
SUMMARY ENDING BALANCE SHEET | March 31, | |||||||
2012 | 2011 | |||||||
Total loans | $ | 2,034,440 | $ | 2,064,732 | ||||
Total investment securities | 524,020 | 380,078 | ||||||
Total earning assets | 2,621,833 | 2,595,852 | ||||||
Total assets | 2,925,914 | 2,898,396 | ||||||
Total deposits | 2,401,917 | 2,364,564 | ||||||
Shareholders' equity | 417,920 | 428,869 | ||||||
OTHER DATA | ||||||||
End of period full time equivalent employees | 776 | 833 | ||||||
NOTES: | ||||||||
(A) Excludes the effect on average stockholders' equity of unrealized gains (losses) that result from changes in market values of securities and other comprehensive pension expense. | ||||||||
(B) Computed by dividing non-interest expense less amortization of intangibles and foreclosed asset expense by the sum of net interest income on a fully tax equivalent basis and non-interest income excluding gains on securities, loss on sale of foreclosed assets and other than temporary impairment on securities and goodwill. This is a non-GAAP financial measure, which we believe provides investors with important information regarding our operational efficiency. Comparison of our efficiency ratio with those of other companies may not be possible, because other companies may calculate the efficiency ratio differently. | ||||||||
(C) Individual amounts shown above are calculated from actual, not rounded amounts in the thousands, which appear above. |
STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||
QUARTERLY PERFORMANCE SUMMARY (UNAUDITED) | ||||||||
(Dollars in thousands) | ||||||||
CREDIT QUALITY | Three Months Ended March 31, | |||||||
2012 | 2011 | |||||||
Allowance for loan losses: | ||||||||
Beginning of period | $ | 32,588 | $ | 37,649 | ||||
Provision for loan losses | 850 | 4,500 | ||||||
Charge-offs | (2,383 | ) | (4,979 | ) | ||||
Recoveries | 560 | 349 | ||||||
Net charge-offs | (1,823 | ) | (4,630 | ) | ||||
End of period | $ | 31,615 | $ | 37,519 | ||||
Accruing Troubled Debt Restructurings | $ | 28,646 | $ | 41,335 | ||||
Loans greater than 90 days past due still accruing | $ | 563 | $ | 148 | ||||
March 31, | ||||||||
2012 | 2011 | |||||||
Non accrual loans | $ | 31,558 | $ | 39,096 | ||||
Non accrual TDR's | 6,134 | 4,078 | ||||||
Total non-performing loans | 37,692 | 43,174 | ||||||
Foreclosed assets | 6,836 | 9,036 | ||||||
Total non-performing assets | $ | 44,528 | $ | 52,210 | ||||
Nonperforming assets as a % of total assets | 1.52 | % | 1.80 | % | ||||
Nonperforming assets as a % of loans plus foreclosed assets | 2.18 | % | 2.52 | % | ||||
Allowance for loan losses as a % of total loans | 1.55 | % | 1.82 | % | ||||
Annualized net charge-offs as a % of average loans outstanding | 0.35 | % | 0.88 | % |
March 31, 2012 | ||||||||||||
Loans Outstanding | Nonaccrual Loans | Nonaccrual Loans to Loans Outstanding | ||||||||||
Construction and land development: | ||||||||||||
Commercial | $ | 158,753 | $ | 8,046 | 5.07 | % | ||||||
Residential | 48,478 | 368 | 0.76 | % | ||||||||
Total construction and land development | 207,231 | 8,414 | 4.06 | % | ||||||||
Commercial real estate: | ||||||||||||
Commercial real estate - owner occupied | 317,374 | 5,640 | 1.78 | % | ||||||||
Commercial real estate - non-owner occupied | 421,288 | 3,058 | 0.73 | % | ||||||||
Farmland | 15,851 | 421 | 2.66 | % | ||||||||
Multifamily, nonresidential and junior liens | 97,601 | 5,259 | 5.39 | % | ||||||||
Total commercial real estate | 852,114 | 14,378 | 1.69 | % | ||||||||
Consumer real estate: | ||||||||||||
Home equity lines | 261,851 | 3,201 | 1.22 | % | ||||||||
Secured by 1-4 family residential, secured by first deeds of trust | 451,454 | 10,805 | 2.39 | % | ||||||||
Secured by 1-4 family residential, secured by second deeds of trust | 40,789 | 266 | 0.65 | % | ||||||||
Total consumer real estate | 754,094 | 14,272 | 1.89 | % | ||||||||
Commercial and industrial loans (except those secured by real estate) | 199,453 | 598 | 0.30 | % | ||||||||
Consumer and other: | ||||||||||||
Consumer installment loans | 18,754 | - | 0.00 | % | ||||||||
Deposit overdrafts | 1,213 | - | 0.00 | % | ||||||||
All other loans | 1,581 | 30 | 1.90 | % | ||||||||
Total consumer and other | 21,548 | 30 | 0.14 | % | ||||||||
Total loans | $ | 2,034,440 | $ | 37,692 | 1.85 | % |
STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||||
QUARTERLY PERFORMANCE SUMMARY (UNAUDITED) | ||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||
Percent | ||||||||||||
Increase | ||||||||||||
SELECTED BALANCE SHEET DATA | 3/31/2012 | 3/31/2011 | (Decrease) | |||||||||
Assets | ||||||||||||
Cash and cash equivalents | $ | 85,173 | $ | 178,422 | -52.26 | % | ||||||
Investment securities available for sale | 524,020 | 380,078 | 37.87 | % | ||||||||
Mortgage loans held for sale | 17,058 | 12,047 | 41.60 | % | ||||||||
Loans: | ||||||||||||
Construction and land development | 207,231 | 233,514 | -11.26 | % | ||||||||
Commercial real estate | 852,114 | 855,417 | -0.39 | % | ||||||||
Consumer real estate | 754,094 | 766,789 | -1.66 | % | ||||||||
Commercial and industrial loans (except those secured by real estate) | 199,453 | 190,302 | 4.81 | % | ||||||||
Consumer and other | 21,548 | 18,710 | 15.17 | % | ||||||||
Total loans | 2,034,440 | 2,064,732 | -1.47 | % | ||||||||
Deferred loan costs | 312 | 596 | -47.65 | % | ||||||||
Allowance for loan losses | (31,615 | ) | (37,519 | ) | -15.74 | % | ||||||
Net loans | 2,003,137 | 2,027,809 | -1.22 | % | ||||||||
Premises and equipment, net | 72,602 | 77,893 | -6.79 | % | ||||||||
Deferred income tax asset | - | 2,413 | -100.00 | % | ||||||||
Core deposit intangibles, net | 4,599 | 6,249 | -26.40 | % | ||||||||
Goodwill | 113,652 | 113,652 | 0.00 | % | ||||||||
Bank owned life insurance | 42,853 | 31,435 | 36.32 | % | ||||||||
Foreclosed assets | 6,836 | 9,036 | -24.35 | % | ||||||||
Other assets | 55,984 | 59,362 | -5.69 | % | ||||||||
Total assets | 2,925,914 | 2,898,396 | 0.95 | % | ||||||||
Liabilities | ||||||||||||
Deposits: | ||||||||||||
Noninterest bearing deposits | 338,237 | 307,847 | 9.87 | % | ||||||||
Money market & interest checking | 998,665 | 981,617 | 1.74 | % | ||||||||
Savings | 307,942 | 275,751 | 11.67 | % | ||||||||
CD's and other time deposits | 757,073 | 799,349 | -5.29 | % | ||||||||
Total deposits | 2,401,917 | 2,364,564 | 1.58 | % | ||||||||
Federal funds purchased and securities sold under agreements to repurchase | 856 | 1,156 | -25.95 | % | ||||||||
Federal Home Loan Bank advances | 55,000 | 60,000 | -8.33 | % | ||||||||
Subordinated debt | 32,991 | 32,991 | 0.00 | % | ||||||||
Deferred income tax liability | 3,037 | - | N/A | |||||||||
Other liabilities | 14,193 | 10,816 | 31.22 | % | ||||||||
Total liabilities | 2,507,994 | 2,469,527 | 1.56 | % | ||||||||
Stockholders' equity | ||||||||||||
Preferred stock | - | 28,858 | -100.00 | % | ||||||||
Common stock | 22,859 | 22,776 | 0.36 | % | ||||||||
Additional paid-in capital | 271,050 | 270,396 | 0.24 | % | ||||||||
Retained earnings | 115,056 | 102,677 | 12.06 | % | ||||||||
Accumulated other comprehensive income, net | 8,955 | 4,162 | >100% | |||||||||
Total stockholders’ equity | 417,920 | 428,869 | -2.55 | % | ||||||||
Total liabilities and stockholders’ equity | $ | 2,925,914 | $ | 2,898,396 | 0.95 | % |
STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||||
QUARTERLY PERFORMANCE SUMMARY (UNAUDITED) | ||||||||||||
(Dollars in thousands) | ||||||||||||
Percent | ||||||||||||
For the three months ended | Increase | |||||||||||
3/31/2012 | 3/31/2011 | (Decrease) | ||||||||||
Interest Income | ||||||||||||
Loans, including fees | $ | 26,014 | $ | 27,264 | -4.58 | % | ||||||
Federal funds sold and deposits in other banks | 34 | 68 | -50.00 | % | ||||||||
Investment securities: | ||||||||||||
Taxable | 1,610 | 1,721 | -6.45 | % | ||||||||
Tax-exempt | 1,300 | 1,253 | 3.75 | % | ||||||||
Total interest income | 28,958 | 30,306 | -4.45 | % | ||||||||
Interest Expense | ||||||||||||
Deposits | 4,277 | 5,533 | -22.70 | % | ||||||||
Federal funds purchased and securities sold under agreements to repurchase | 6 | 8 | -25.00 | % | ||||||||
Federal Home Loan Bank advances | 438 | 640 | -31.56 | % | ||||||||
Subordinated debt | 341 | 262 | 30.15 | % | ||||||||
Total interest expense | 5,062 | 6,443 | -21.43 | % | ||||||||
Net interest income | 23,896 | 23,863 | 0.14 | % | ||||||||
Provision for loan losses | 850 | 4,500 | -81.11 | % | ||||||||
Net interest income after provision for loan losses | 23,046 | 19,363 | 19.02 | % | ||||||||
Noninterest Income | ||||||||||||
Retail banking fees | 3,795 | 3,556 | 6.72 | % | ||||||||
Commissions and fees from fiduciary activities | 929 | 904 | 2.77 | % | ||||||||
Brokerage fee income | 414 | 435 | -4.83 | % | ||||||||
Mortgage banking-related fees | 2,184 | 2,065 | 5.76 | % | ||||||||
Losses on mortgage indemnifications and repurchases | (354 | ) | (265 | ) | 33.58 | % | ||||||
Losses on sale of premises and equipment | (16 | ) | - | N/A | ||||||||
Gains on securities available for sale | 73 | 10 | >100% | |||||||||
Losses on sale / impairments of foreclosed assets | (348 | ) | (128 | ) | >100% | |||||||
Income from bank owned life insurance | 440 | 319 | 37.93 | % | ||||||||
Other operating income | 1,008 | 774 | 30.23 | % | ||||||||
Total noninterest income | 8,125 | 7,670 | 5.93 | % | ||||||||
Noninterest Expense | ||||||||||||
Compensation and employee benefits | 12,624 | 12,355 | 2.18 | % | ||||||||
Net occupancy | 2,063 | 2,073 | -0.48 | % | ||||||||
Equipment | 2,218 | 2,020 | 9.80 | % | ||||||||
Amortization-intangible assets | 413 | 413 | 0.00 | % | ||||||||
Marketing | 249 | 327 | -23.85 | % | ||||||||
State franchise taxes | 568 | 598 | -5.02 | % | ||||||||
FDIC insurance | 639 | 877 | -27.14 | % | ||||||||
Data processing | 671 | 636 | 5.50 | % | ||||||||
Professional fees | 681 | 633 | 7.58 | % | ||||||||
Telecommunications | 425 | 376 | 13.03 | % | ||||||||
Other operating expenses | 3,006 | 3,228 | -6.88 | % | ||||||||
Total noninterest expense | 23,557 | 23,536 | 0.09 | % | ||||||||
Income before income taxes | 7,614 | 3,497 | >100% | |||||||||
Income tax expense | 2,114 | 626 | >100% | |||||||||
Net income | $ | 5,500 | $ | 2,871 | 91.57 | % |
STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||||||||||||||||
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (UNAUDITED) | ||||||||||||||||||||||||
THREE MONTHS ENDED MARCH 31, 2012 AND 2011 | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
For the Three Months Ended March 31, | ||||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||
Average | Interest | Average | Average | Interest | Average | |||||||||||||||||||
Balance | Inc/Exp | Rates | Balance | Inc/Exp | Rates | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
Loans receivable, net (1) | $ | 2,054,830 | $ | 26,040 | 5.10 | % | $ | 2,104,031 | $ | 27,303 | 5.26 | % | ||||||||||||
Investment securities | ||||||||||||||||||||||||
Taxable | 322,372 | 1,610 | 1.98 | % | 229,709 | 1,720 | 3.00 | % | ||||||||||||||||
Tax exempt (1) | 138,864 | 2,000 | 5.70 | % | 129,318 | 1,928 | 5.96 | % | ||||||||||||||||
Total investments | 461,236 | 3,610 | 3.10 | % | 359,027 | 3,648 | 4.06 | % | ||||||||||||||||
Interest bearing deposits | 37,156 | 20 | 0.21 | % | 77,042 | 36 | 0.19 | % | ||||||||||||||||
Federal funds sold | 22,167 | 14 | 0.28 | % | 51,390 | 32 | 0.25 | % | ||||||||||||||||
520,559 | 3,644 | 2.77 | % | 487,459 | 3,716 | 3.05 | % | |||||||||||||||||
Total earning assets | 2,575,389 | $ | 29,684 | 4.64 | % | 2,591,490 | $ | 31,019 | 4.85 | % | ||||||||||||||
Total nonearning assets | 322,235 | 318,752 | ||||||||||||||||||||||
Total assets | $ | 2,897,624 | $ | 2,910,242 | ||||||||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||||||||
Interest checking | $ | 585,017 | $ | 396 | 0.27 | % | $ | 559,393 | $ | 533 | 0.39 | % | ||||||||||||
Money market | 412,739 | 544 | 0.53 | % | 420,202 | 1,041 | 1.00 | % | ||||||||||||||||
Savings | 296,373 | 332 | 0.45 | % | 268,854 | 468 | 0.71 | % | ||||||||||||||||
Time deposits: | ||||||||||||||||||||||||
Less than $100,000 | 507,797 | 1,896 | 1.50 | % | 542,760 | 2,243 | 1.68 | % | ||||||||||||||||
$100,000 and more | 259,364 | 1,109 | 1.72 | % | 264,169 | 1,248 | 1.92 | % | ||||||||||||||||
Total interest-bearing deposits | 2,061,290 | 4,277 | 0.83 | % | 2,055,378 | 5,533 | 1.09 | % | ||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 835 | 6 | 2.95 | % | 1,044 | 8 | 3.07 | % | ||||||||||||||||
Federal Home Loan Bank advances | 57,363 | 438 | 3.02 | % | 80,000 | 640 | 3.20 | % | ||||||||||||||||
Subordinated debt | 32,991 | 341 | 4.09 | % | 32,991 | 262 | 3.18 | % | ||||||||||||||||
91,189 | 785 | 3.41 | % | 114,035 | 910 | 3.19 | % | |||||||||||||||||
Total interest-bearing liabilities | 2,152,479 | 5,062 | 0.94 | % | 2,169,413 | 6,443 | 1.20 | % | ||||||||||||||||
Total noninterest-bearing liabilities | 328,147 | 313,097 | ||||||||||||||||||||||
Total liabilities | 2,480,626 | 2,482,510 | ||||||||||||||||||||||
Stockholders' equity | 416,998 | 427,732 | ||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 2,897,624 | $ | 2,910,242 | ||||||||||||||||||||
Net interest income (tax equivalent) | $ | 24,622 | $ | 24,576 | ||||||||||||||||||||
Average interest rate spread | 3.70 | % | 3.65 | % | ||||||||||||||||||||
Interest expense as percentage of average earning assets | 0.79 | % | 1.01 | % | ||||||||||||||||||||
Net interest margin | 3.85 | % | 3.85 | % |
(1) Income and yields are reported on a taxable equivalent basis using a 35% tax rate.
STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||||||||
FINANCIAL INFORMATION - FOUR QUARTER TREND (UNAUDITED) | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
2012 | 2011 | |||||||||||||||
Quarter Ended | ||||||||||||||||
March 31, | December 31, | September 30, | June 30, | |||||||||||||
Interest income | $ | 28,958 | $ | 29,793 | $ | 30,394 | $ | 30,369 | ||||||||
Interest expense | 5,062 | 5,520 | 6,151 | 6,326 | ||||||||||||
Net interest income | 23,896 | 24,273 | 24,243 | 24,043 | ||||||||||||
Provision for loan losses | 850 | 1,750 | 3,300 | 3,150 | ||||||||||||
Total net interest income after provision | 23,046 | 22,523 | 20,943 | 20,893 | ||||||||||||
Non interest income | 8,125 | 8,409 | 7,864 | 7,521 | ||||||||||||
Non interest expense | 23,557 | 24,595 | 23,346 | 23,220 | ||||||||||||
Income before income taxes | 7,614 | 6,337 | 5,461 | 5,194 | ||||||||||||
Income tax expense | 2,114 | 1,568 | 1,242 | 1,169 | ||||||||||||
Net income | $ | 5,500 | $ | 4,769 | $ | 4,219 | $ | 4,025 | ||||||||
Preferred stock dividends | - | (271 | ) | (223 | ) | (354 | ) | |||||||||
Accretion of preferred stock discount | - | (702 | ) | (73 | ) | (366 | ) | |||||||||
Net income available to common shareholders | $ | 5,500 | $ | 3,796 | $ | 3,923 | $ | 3,305 | ||||||||
Net income per share | ||||||||||||||||
basic | $ | 0.24 | $ | 0.17 | $ | 0.17 | $ | 0.15 | ||||||||
diluted | $ | 0.24 | $ | 0.17 | $ | 0.17 | $ | 0.14 |
STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||||||||||||||||
SEGMENT INFORMATION (UNAUDITED) | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
At and for the Three Months Ended March 31, 2012 | ||||||||||||||||||||||||
Commercial | Mortgage | Wealth | Intersegment | |||||||||||||||||||||
Banking | Banking | Management | Other | Elimination | Consolidated | |||||||||||||||||||
Net interest income | $ | 23,992 | $ | 245 | $ | - | $ | (341 | ) | $ | - | $ | 23,896 | |||||||||||
Provision for loan losses | 850 | - | - | - | - | 850 | ||||||||||||||||||
Noninterest income | 6,125 | 1,811 | 1,393 | 27 | (1,231 | ) | 8,125 | |||||||||||||||||
Noninterest expense | 21,725 | 1,740 | 1,135 | 188 | (1,231 | ) | 23,557 | |||||||||||||||||
Provision for income taxes | 2,123 | 95 | 77 | (181 | ) | - | 2,114 | |||||||||||||||||
Net income (loss) | $ | 5,419 | $ | 221 | $ | 181 | $ | (321 | ) | $ | - | $ | 5,500 | |||||||||||
Total Assets | $ | 2,900,980 | $ | 17,383 | $ | 506 | $ | 455,548 | $ | (448,503 | ) | $ | 2,925,914 | |||||||||||
Average Assets | $ | 2,865,457 | $ | 24,988 | $ | 461 | $ | 454,809 | $ | (448,091 | ) | $ | 2,897,624 | |||||||||||
At and for the Three Months Ended March 31, 2011 | ||||||||||||||||||||||||
Commercial | Mortgage | Wealth | Intersegment | |||||||||||||||||||||
Banking | Banking | Management | Other | Elimination | Consolidated | |||||||||||||||||||
Net interest income | $ | 23,879 | $ | 245 | $ | - | $ | (261 | ) | $ | - | $ | 23,863 | |||||||||||
Provision for loan losses | 4,500 | - | - | - | - | 4,500 | ||||||||||||||||||
Noninterest income | 5,644 | 1,875 | 1,339 | 26 | (1,214 | ) | 7,670 | |||||||||||||||||
Noninterest expense | 21,555 | 1,906 | 1,093 | 196 | (1,214 | ) | 23,536 | |||||||||||||||||
Provision for income taxes | 645 | 64 | 74 | (157 | ) | - | 626 | |||||||||||||||||
Net income (loss) | $ | 2,823 | $ | 150 | $ | 172 | $ | (274 | ) | $ | - | $ | 2,871 | |||||||||||
Total Assets | $ | 2,876,655 | $ | 12,613 | $ | 498 | $ | 465,231 | $ | (456,601 | ) | $ | 2,898,396 | |||||||||||
Average Assets | $ | 2,875,584 | $ | 24,683 | $ | 485 | $ | 464,309 | $ | (454,819 | ) | $ | 2,910,242 |
STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||||
NON-GAAP RECONCILIATION (UNAUDITED) | ||||||||||||
(Dollars in thousands) | ||||||||||||
For the three months ended | ||||||||||||
March 31, 2012 | December 31, 2011 | March 31, 2011 | ||||||||||
Noninterest expense | $ | 23,557 | $ | 24,595 | $ | 23,536 | ||||||
Less: | ||||||||||||
Foreclosed asset expense | 104 | 151 | 81 | |||||||||
Amortization of intangible assets | 413 | 413 | 413 | |||||||||
Adjusted noninterest expense | 23,040 | 24,031 | 23,042 | |||||||||
Net interest income (tax equivalent) | 24,622 | 25,060 | 24,576 | |||||||||
Noninterest income | 8,125 | 8,409 | 7,670 | |||||||||
Less: | ||||||||||||
Gains on sale of securities available for sale | 73 | 447 | 10 | |||||||||
Losses / impairments on foreclosed assets | (348 | ) | (432 | ) | (128 | ) | ||||||
Net revenues | $ | 33,022 | $ | 33,454 | $ | 32,364 | ||||||
Efficiency ratio | 69.77 | % | 71.83 | % | 71.20 | % | ||||||
For the three months ended | ||||||||||||
March 31, 2012 | December 31, 2011 | March 31, 2011 | ||||||||||
Noninterest income | $ | 8,125 | $ | 8,409 | $ | 7,670 | ||||||
Less: | ||||||||||||
Gains on securities available for sale | 73 | 447 | 10 | |||||||||
(Losses) gains on sale of premises and equipment | (16 | ) | 91 | - | ||||||||
Operating earnings | $ | 8,068 | $ | 7,871 | $ | 7,660 | ||||||
For the three months ended | ||||||||||||
March 31, 2012 | December 31, 2011 | March 31, 2011 | ||||||||||
Net income | $ | 5,500 | $ | 4,769 | $ | 2,871 | ||||||
Plus: | ||||||||||||
Income tax expense | 2,114 | 1,568 | 626 | |||||||||
Provision for loan losses | 850 | 1,750 | 4,500 | |||||||||
Pre-tax pre-provision earnings | $ | 8,464 | $ | 8,087 | $ | 7,997 | ||||||
For the three months ended | ||||||||||||
March 31, 2012 | December 31, 2011 | March 31, 2011 | ||||||||||
Total stockholders' equity | $ | 417,920 | $ | 414,173 | $ | 428,869 | ||||||
Less: | ||||||||||||
Preferred stock | - | - | 28,858 | |||||||||
Core deposit intangibles, net | 4,599 | 5,011 | 6,249 | |||||||||
Goodwill | 113,652 | 113,652 | 113,652 | |||||||||
Net other intangibles | 1,084 | 1,183 | 1,480 | |||||||||
Tangible common equity | 298,585 | 294,327 | 278,630 | |||||||||
Total assets | 2,925,914 | 2,917,928 | 2,898,396 | |||||||||
Less: | ||||||||||||
Core deposit intangibles, net | 4,599 | 5,011 | 6,249 | |||||||||
Goodwill | 113,652 | 113,652 | 113,652 | |||||||||
Net other intangibles | 1,084 | 1,183 | 1,480 | |||||||||
Tangible assets | $ | 2,806,579 | $ | 2,798,082 | $ | 2,777,015 | ||||||
Tangible common equity ratio | 10.64 | % | 10.52 | % | 10.03 | % |