Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact:
Jeffrey W. Farrar
Executive Vice President and CFO
(434) 964-2217
jfarrar@stellarone.com
STELLARONE CORPORATION
ANNOUNCES THIRD QUARTER EARNINGS AND CASH
DIVIDEND
Charlottesville, VA, October 29, 2008 – StellarOne Corporation (NASDAQ: STEL) (StellarOne) today reported third quarter 2008 earnings of $2.0 million, or $.09 per diluted share, compared to $4.3 million or $.40 per diluted share, earned during the third quarter of 2007. These results reflect decreases of 53.1% and 77.5%, respectively, compared to the same quarter last year. Operating earnings for the third quarter of 2008 totaled $2.5 million, or $.11 per diluted share, excluding $490 thousand associated with after-tax charges associated with merger integration, an other-than-temporary impairment charge and non-recurring litigation costs, compared to operating earnings for the third quarter of 2007 which approximated net income of $4.3 million or $.40 per diluted share. StellarOne’s year to date operating results include the former Virginia Financial Group, Inc. (VFG) for the entire period, but results from the former FNB Corporation (FNB) are only included from February 28, 2008 forward, representing the period subsequent to consummation of the merger of equals transaction between VFG and FNB. Historical 2007 data contained herein reflects only the results of the former VFG prior to merger.
O.R. Barham, Jr., President and CEO, commented, “We are experiencing unprecedented events in the financial markets which are having a negative impact on our customers, stockholders and the economy in general. In spite of these challenges, StellarOne remains a strong and vibrant company capable of weathering the credit and economic challenges ahead. As previously announced, we experienced an increase in nonperforming assets and credit losses during the third quarter which necessitated an increase in loan loss provision expense. The loan loss provisioning is a direct result of deterioration in the acquisition and development component of our loan portfolio, particularly at Smith Mountain Lake, which continues to reflect the primary risk in our portfolio. We are pleased to report earnings in the face of significant charges for the quarter, and are proud of the strong capital levels we maintain. We reiterate our confidence in the processes we have in place to effectively manage the business model during this downturn and minimize the associated risks.”
For the first nine months of 2008, net income was $10.3 million compared to $12.9 million earned in the first nine months of 2007, a decrease of 20.4%. Diluted earnings per share for the first nine months of 2008 amounted to $.51 per share compared to $1.19 per share during the same period in 2007. Operating earnings for the first nine months of 2008, excluding the after-tax effects of merger-related, integration, other-than-temporary impairments and nonrecurring litigation costs, amounted to $12.5 million or $.62 per diluted share, compared to $12.8 million or $1.19 per diluted share for the same period in 2007.
Asset Quality Challenges Increase
StellarOne’s ratio of non-performing assets as a percentage of total assets increased to 1.65% as of September 30, 2008, compared to .86% at June 30, 2008. This increase is a result of declining market conditions in general and the downgrade of one significant acquisition and development relationship to nonaccrual status. Annualized net charge-offs as a percentage of average loans receivable amounted to .44% for the third quarter of 2008, compared to .22% for the second quarter of 2008.
StellarOne recorded a provision for loan losses of $6.0 million for the third quarter of 2008, an increase of $3.2 million compared to the second quarter of 2008. The third quarter provision compares to net charge-offs of $2.5 million for the quarter, allowing for building of the allowance as a percentage of total loans to 1.40% as compared to 1.25% at June 30. The increased levels of provisioning reflect actions taken to address the continuing challenges in the residential housing market and deterioration of credit quality in a limited number of acquisition and development construction credits, with the largest concentration of credit issues emanating from a total exposure of approximately $50 million in the Smith Mountain Lake, Virginia resort area.
As previously announced, StellarOne recorded a loss of $1.7 million during the third quarter of 2008 in connection with the auction of certain assets that had been reclassified as held for sale in conjunction with the merger of Virginia Financial Group, Inc. and FNB Corporation. Proceeds from this auction amounted to $3.8 million, and approximately $1 million in property was taken back at auction and included in foreclosed assets and non-performing assets at quarter end. StellarOne also previously reported an other than temporary impairment charge of $274 thousand recorded in the third quarter associated with a small ownership in stock of Fannie Mae.
Capital Levels Remain Strong
StellarOne continues to maintain a strong capital base, with both tangible equity and Tier 1 Risked Based regulatory capital reflecting increases for the third quarter of 2008. Tangible equity as a percentage of tangible assets was 9.65% at Sept. 30, compared to 9.57% at June 30. Tier 1 Risked Based Capital Ratio was 12.17% at Sept. 30, compared to 11.73% at June 30. StellarOne’s tangible and Tier 1 Risked Based Capital ratios are well in excess of the median for its peer group. Shareholder’s equity represented 12.33% of total assets at Sept. 30, while book value at Sept. 30 was $16.31 per share.
Revenue Growth in Retail Banking Offset by Decline in Mortgage Revenues
On an operating basis, which excludes gains and losses from sale of assets, total non-interest income amounted to $7.1 million, a decrease of $615 thousand or 8.0% from $7.7 million for second quarter of 2008. Retail banking fee income amounted to $4.1 million, an increase of $190 thousand or 4.9% compared to $3.9 million for the second quarter of 2008. Mortgage banking revenue amounted to $607 thousand, a decrease of $750 thousand or greater than 100%, as compared to $1.4 million for the second quarter of 2008. Revenues from trust and brokerage for the third quarter of 2008 were $1.3 million, down $89 thousand or 6.4% compared to $1.4 million in the second quarter of 2008 on lower market valuations for assets under management.
Merger Cost Savings Materialize as Projected
Non-interest expense for the third quarter of 2008 amounted to $23.2 million, a decrease of $1.5 million compared to $24.6 million for the second quarter of 2008. Normalizing the non-interest expense for non-recurring
merger integration, other-than-temporary impairment and litigation costs of $670 thousand, and adjusting for the acceleration of deposit insurance premiums during the third quarter of $593 thousand associated with the exhausting of Federal Deposit Insurance Corporation (FDIC) insurance assessment credits, non-interest expenses decreased $2.7 million or 11% as compared to the second quarter of 2008. StellarOne’s efficiency ratio was 66.63% for the third quarter of 2008, compared to 65.26% for the second quarter of 2008. Excluding the effects of nonrecurring items per above, the efficiency ratio was 65.15% for the third quarter compared to 67.29% for second quarter of 2008.
Stable Balance Sheet
Average loans for the third quarter of 2008 were $2.28 billion, down $18.6 million or .8% from the second quarter of 2008. Average securities were $343.3 million for the third quarter of 2008, down $59.8 million or 14.8% from the second quarter of 2008. Average deposits for the third quarter were $2.38 billion, essentially flat with average balances for the second quarter of 2008. Total average earning assets were $2.68 billion for the third quarter of 2008, down $75.4 million or 2.7% compared to the second quarter of 2008. At Sept. 30, 2008, total assets were $2.99 billion, compared to $3.03 billion at June 30, 2008. Shareholder’s equity at Sept. 30, 2008 was $365.0 million, an increase of $2.0 million or .6% compared to June 30, 2008.
Core Margin Remains Stable
Net interest income, on a tax-equivalent basis and excluding the effects of purchase accounting amortization, amounted to $25.2 million for the third quarter of 2008, essentially flat with the $25.3 million for the second quarter of 2008. The core net interest margin, adjusted to exclude the effect of purchasing accounting amortization, was 3.72% for the third quarter, compared to 3.69% for the second quarter of 2008. Including the effects of purchase accounting adjustments, the net interest margin was 4.06% for the quarter, compared to 4.37% for the second quarter of 2008.
Quarterly Cash Dividend
The Board of Directors of StellarOne Corporation has declared a quarterly dividend of $.16 per share, payable on November 28 to shareholders of record on November 7, 2008. This dividend represents a yield of 4.27% based on the closing price of StellarOne’s stock on October 23, 2008 ($14.98).
About StellarOne
StellarOne Corporation is a traditional community bank, offering a full range of business and consumer banking services, including trust and asset management services, via its trust company division. Through the activities of its sole affiliate, StellarOne Bank, StellarOne operates 63 full-service financial centers, one loan production office, and over 80 ATMs serving the New River Valley, Roanoke Valley, Shenandoah Valley, and Central and North Central Virginia.
Non-GAAP Financial Measures
This report refers to the efficiency ratio, which is computed by dividing non-interest expense by the sum of net interest income on a tax equivalent basis and non-interest income excluding gains or losses on securities, fixed assets and foreclosed assets. It also refers to operating earnings, which reflects net income and associated performance ratios adjusted for non-recurring expenses associated with mergers, asset gains and losses or expenses that are unusual in nature. 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 we believe provides investors with important information regarding our operational efficiency. Comparison of our efficiency ratio or operating earnings with those of other
companies may not be possible, because other companies may calculate them differently. Management believes such financial information is meaningful to the reader in understanding operating performance, but cautions that such information 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 atwww.StellarOne.com.
NOTE: Risk-based capital ratios are preliminary.
SELECTED FINANCIAL DATA
StellarOne Corporation (NASDAQ: STEL)
(Dollars in thousands, except per share data)
SUMMARY INCOME STATEMENT | Three Months Ended September | Nine Months Ended September | ||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Interest income—taxable equivalent | $ | 42,540 | $ | 25,250 | $ | 118,366 | $ | 76,348 | ||||||||
Interest expense | 15,120 | 10,312 | 42,952 | 31,054 | ||||||||||||
Net interest income—taxable equivalent | 27,420 | 14,938 | 75,414 | 45,294 | ||||||||||||
Less: taxable equivalent adjustment | 602 | 536 | 1,748 | 1,621 | ||||||||||||
Net interest income | 26,818 | 14,402 | 73,666 | 43,673 | ||||||||||||
Provision for loan and lease losses | 6,000 | 200 | 9,787 | 365 | ||||||||||||
Net interest income after provision for loan and lease losses | 20,818 | 14,202 | 63,879 | 43,308 | ||||||||||||
Noninterest income | 5,084 | 4,257 | 17,895 | 12,420 | ||||||||||||
Noninterest expense | 23,159 | 12,388 | 66,806 | 37,529 | ||||||||||||
Provision for income taxes | 714 | 1,748 | 4,712 | 5,317 | ||||||||||||
Net income | $ | 2,029 | $ | 4,323 | $ | 10,256 | $ | 12,882 | ||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 0.09 | $ | 0.40 | $ | 0.51 | $ | 1.19 | ||||||||
Diluted | $ | 0.09 | $ | 0.40 | $ | 0.51 | $ | 1.19 | ||||||||
SUMMARY AVERAGE BALANCE SHEET | Three Months Ended September | Nine Months Ended September | ||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Total loans | $ | 2,279,282 | $ | 1,199,114 | $ | 2,066,251 | $ | 1,209,413 | ||||||||
Total securities | 343,334 | 258,403 | 331,957 | 262,020 | ||||||||||||
Total earning assets | 2,683,757 | 1,458,729 | 2,449,972 | 1,473,659 | ||||||||||||
Total assets | 2,992,850 | 1,566,391 | 2,719,226 | 1,585,471 | ||||||||||||
Total deposits | 2,380,468 | 1,206,419 | 2,109,783 | 1,243,472 | ||||||||||||
Shareholders’ Equity | 365,086 | 156,458 | 317,750 | 153,957 | ||||||||||||
PERFORMANCE RATIOS | Three Months Ended September | Nine Months Ended September | ||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Return on average assets | 0.27 | % | 1.10 | % | 0.50 | % | 1.09 | % | ||||||||
Return on average equity | 2.21 | % | 10.96 | % | 4.31 | % | 11.19 | % | ||||||||
Return on average realized equity (A) | 2.19 | % | 10.88 | % | 4.31 | % | 11.12 | % | ||||||||
Net interest margin (taxable equivalent) | 4.06 | % | 4.06 | % | 4.11 | % | 4.11 | % | ||||||||
Efficiency (taxable equivalent) (B) | 66.63 | % | 64.71 | % | 69.60 | % | 65.04 | % | ||||||||
CREDIT QUALITY | Three Months Ended September | Nine Months Ended September | ||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Allowance for loan losses: | ||||||||||||||||
Beginning of period | $ | 28,615 | $ | 14,495 | $ | 15,082 | $ | 14,500 | ||||||||
Provision for loan losses | 6,000 | 200 | 9,787 | 365 | ||||||||||||
Charge-offs | (2,686 | ) | (188 | ) | (5,212 | ) | (433 | ) | ||||||||
Recoveries | 172 | 110 | 905 | 185 | ||||||||||||
Net charge-offs | (2,514 | ) | (78 | ) | (4,307 | ) | (248 | ) | ||||||||
Allowance acquired via acquisition | — | — | 11,539 | — | ||||||||||||
End of period | $ | 32,101 | $ | 14,617 | $ | 32,101 | $ | 14,617 | ||||||||
September 30 | Nine Months Ended September | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Total non-performing assets | $ | 49,330 | $ | 7,487 | ||||||||||||
Nonperforming assets as a % of total assets: | 1.65 | % | 0.47 | % | ||||||||||||
Nonperforming assets as a % of loans plus foreclosed assets | 2.15 | % | 0.62 | % | ||||||||||||
Allowance for loan losses as a % of total loans | 1.40 | % | 1.21 | % | ||||||||||||
Net charge-offs as a % of average loans outstanding | 0.44 | % | 0.03 | % | 0.28 | % | 0.03 | % | ||||||||
CAPITAL MANAGEMENT | September 30 | |||||||||||||||
2008 | 2007 | |||||||||||||||
Risk based capital ratios | ||||||||||||||||
Tier 1 | 12.17 | % | 11.89 | % | ||||||||||||
Tangible equity ratio | 9.65 | % | 9.57 | % | ||||||||||||
Period end shares issued and outstanding | 22,599,223 | 10,795,097 | ||||||||||||||
Three Months Ended September | Nine Months Ended September | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Shares issued | 1,527 | 2,300 | 11,803,280 | 10,794 | ||||||||||||
Average shares issued and outstanding | 22,599,189 | 10,794,322 | 20,095,261 | 10,792,268 | ||||||||||||
Average diluted shares issued and outstanding | 22,669,384 | 10,816,799 | 20,164,890 | 10,817,731 | ||||||||||||
Dividends paid per common share | $ | 0.16 | $ | 0.16 | $ | 0.48 | $ | 0.48 | ||||||||
SUMMARY ENDING BALANCE SHEET | September 30 | |||||||||||||||
2008 | 2007 | |||||||||||||||
Total loans | $ | 2,285,949 | $ | 1,210,277 | ||||||||||||
Total securities | 374,080 | 252,401 | ||||||||||||||
Total earning assets | 2,690,395 | 1,461,367 | ||||||||||||||
Total assets | 2,985,858 | 1,586,716 | ||||||||||||||
Total deposits | 2,349,916 | 1,173,413 | ||||||||||||||
Shareholders’ Equity | 364,967 | 159,152 | ||||||||||||||
Book value per share | $ | 16.31 | $ | 14.74 | ||||||||||||
OTHER DATA | ||||||||||||||||
End of period full time employees | 841 | 512 |
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 by the sum of net interest income and non-interest income, net of gains or losses on securities, fixed assets and foreclosed assets. 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. |
QUARTERLY PERFORMANCE SUMMARY
StellarOne Corporation (NASDAQ: STEL)
(Dollars in thousands, except per share data)
9/30/2008 | 9/30/2007 | Percent Increase (Decrease) | |||||||||
SELECTED BALANCE SHEET DATA | |||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 80,844 | $ | 42,645 | 89.57 | % | |||||
Securities available for sale | 373,155 | 249,746 | 49.41 | % | |||||||
Securities held to maturity | 925 | 2,655 | -65.16 | % | |||||||
Total securities | 374,080 | 252,401 | 48.21 | % | |||||||
Mortgage loans held for sale | 8,975 | 6,648 | 35.00 | % | |||||||
Real estate—construction | 386,423 | 225,268 | 71.54 | % | |||||||
Real estate—1-4 family residential | 746,740 | 326,858 | >100.00 | % | |||||||
Real estate—commercial and multifamily | 845,026 | 507,096 | 66.64 | % | |||||||
Commercial, financial and agricultural | 227,503 | 117,490 | 93.64 | % | |||||||
Consumer loans | 64,551 | 27,544 | >100.00 | % | |||||||
All other loans | 15,706 | 6,021 | >100.00 | % | |||||||
Total loans | 2,285,949 | 1,210,277 | 88.88 | % | |||||||
Deferred loan costs | 1,056 | 1,036 | 1.93 | % | |||||||
Allowance for loan losses | (32,101 | ) | (14,617 | ) | >100.00 | % | |||||
Net loans | 2,254,904 | 1,196,696 | 88.43 | % | |||||||
Premises and equipment, net | 87,510 | 37,186 | >100.00 | % | |||||||
Core deposit intangibles, net | 10,704 | 3,386 | >100.00 | % | |||||||
Goodwill | 74,488 | 13,896 | >100.00 | % | |||||||
Bank owned life insurance | 28,572 | 10,597 | >100.00 | % | |||||||
Foreclosed assets | 4,189 | — | N/A | ||||||||
Other assets | 61,592 | 23,261 | >100.00 | % | |||||||
Total assets | 2,985,858 | 1,586,716 | 88.18 | % | |||||||
Liabilities | |||||||||||
Deposits: | |||||||||||
Noninterest bearing deposits | 333,826 | 214,412 | 55.69 | % | |||||||
Money market & interest checking | 720,308 | 305,236 | >100.00 | % | |||||||
Savings | 198,232 | 84,505 | >100.00 | % | |||||||
CD’s and other time deposits | 1,097,550 | 569,260 | 92.80 | % | |||||||
Total deposits | 2,349,916 | 1,173,413 | >100.00 | % | |||||||
Federal funds purchased and securities sold under agreements to repurchase | 708 | 35,500 | -98.01 | % | |||||||
Federal Home Loan Bank advances | 220,717 | 107,000 | >100.00 | % | |||||||
Subordinated debt | 32,991 | 20,619 | 60.00 | % | |||||||
Commercial paper | — | 76,082 | -100.00 | % | |||||||
Other borrowings | — | 4,213 | -100.00 | % | |||||||
Other liabilities | 16,559 | 10,737 | 54.22 | % | |||||||
Total liabilities | 2,620,891 | 1,427,564 | 83.59 | % | |||||||
Stockholders’ equity | |||||||||||
Common stock | 22,599 | 10,795 | >100.00 | % | |||||||
Additional paid-in capital | 225,411 | 34,327 | >100.00 | % | |||||||
Retained earnings | 118,273 | 114,616 | 3.19 | % | |||||||
Accumulated other comprehensive loss, net | (1,316 | ) | (586 | ) | >100.00 | % | |||||
Total stockholders’ equity | 364,967 | 159,152 | >100.00 | % | |||||||
Total liabilities and stockholders’ equity | $ | 2,985,858 | $ | 1,586,716 | 88.18 | % |
QUARTERLY PERFORMANCE SUMMARY
StellarOne Corporation (NASDAQ: STEL)
(Dollars in thousands)
For the Three Months Ended | Percent Increase (Decrease) | ||||||||||
9/30/2008 | 9/30/2007 | ||||||||||
Interest Income | |||||||||||
Loans, including fees | $ | 37,619 | $ | 21,891 | 71.85 | % | |||||
Federal funds sold and deposits in other banks | 291 | 13 | >100.00 | % | |||||||
Investment securities: | |||||||||||
Taxable | 2,829 | 1,738 | 62.77 | % | |||||||
Tax-exempt | 888 | 922 | -3.69 | % | |||||||
Dividends | 311 | 150 | >100.00 | % | |||||||
Total interest income | 41,938 | 24,714 | 69.69 | % | |||||||
Interest Expense | |||||||||||
Deposits | 12,839 | 7,634 | 68.18 | % | |||||||
Federal funds repurchased and securities sold under agreements to repurchase | 4 | 190 | -97.89 | % | |||||||
Federal Home Loan Bank advances | 1,795 | 1,206 | 48.84 | % | |||||||
Subordinated debt | 481 | 426 | 12.91 | % | |||||||
Commercial paper | — | 844 | -100.00 | % | |||||||
Other borrowings | 1 | 12 | -91.67 | % | |||||||
Total interest expense | 15,120 | 10,312 | 46.63 | % | |||||||
Net interest income | 26,818 | 14,402 | 86.21 | % | |||||||
Provision for loan losses | 6,000 | 200 | >100.00 | % | |||||||
Net interest income after provision for loan losses | 20,818 | 14,202 | 46.58 | % | |||||||
Noninterest Income | |||||||||||
Retail banking fees | 4,083 | 2,008 | >100.00 | % | |||||||
Commissions and fees from fiduciary activities | 984 | 855 | 15.09 | % | |||||||
Brokerage fee income | 316 | 185 | 70.81 | % | |||||||
Mortgage banking-related fees | 607 | 602 | 0.83 | % | |||||||
Losses on sale of premises and equipment | — | (19 | ) | -100.00 | % | ||||||
(Losses) gains on securities available for sale | (333 | ) | 67 | >100.00 | % | ||||||
Losses on sale of foreclosed assets | (1,669 | ) | — | N/A | |||||||
Income from bank owned life insurance | 359 | 135 | >100.00 | % | |||||||
Other operating income | 737 | 424 | 73.82 | % | |||||||
Total noninterest income | 5,084 | 4,257 | 19.43 | % | |||||||
Noninterest Expense | |||||||||||
Compensation and employee benefits | 11,251 | 6,635 | 69.57 | % | |||||||
Net occupancy | 2,040 | 907 | >100.00 | % | |||||||
Supplies and equipment | 2,202 | 1,017 | >100.00 | % | |||||||
Amortization-intangible assets | 438 | 161 | >100.00 | % | |||||||
Marketing | 565 | 480 | 17.71 | % | |||||||
State franchise taxes | 556 | 298 | 86.58 | % | |||||||
FDIC insurance | 661 | 36 | |||||||||
Data processing | 726 | 451 | 60.98 | % | |||||||
Professional fees | 622 | 195 | >100.00 | % | |||||||
Telecommunications | 513 | 273 | 87.91 | % | |||||||
Other operating expenses | 3,585 | 1,935 | >100.00 | % | |||||||
Total noninterest expense | 23,159 | 12,388 | 86.95 | % | |||||||
Income before income taxes | 2,743 | 6,071 | -54.82 | % | |||||||
Income tax expense | 714 | 1,748 | -59.15 | % | |||||||
Net income | $ | 2,029 | $ | 4,323 | -53.07 | % |
QUARTERLY PERFORMANCE SUMMARY
StellarOne Corporation (NASDAQ: STEL)
(Dollars in thousands)
For the Nine Months Ended | Percent Increase (Decrease) | ||||||||||
9/30/2008 | 9/30/2007 | ||||||||||
Interest Income | |||||||||||
Loans, including fees | $ | 104,088 | $ | 66,154 | 57.34 | % | |||||
Federal funds sold and deposits in other banks | 853 | 84 | >100.00 | % | |||||||
Investment securities: | |||||||||||
Taxable | 8,039 | 5,287 | 52.05 | % | |||||||
Tax-exempt | 2,720 | 2,792 | -2.58 | % | |||||||
Dividends | 918 | 410 | >100.00 | % | |||||||
Total interest income | 116,618 | 74,727 | 56.06 | % | |||||||
Interest Expense | |||||||||||
Deposits | 35,501 | 24,008 | 47.87 | % | |||||||
Federal funds purchased and securities sold under agreements to repurchase | 64 | 415 | -84.58 | % | |||||||
Federal Home Loan Bank advances | 5,334 | 2,951 | 80.75 | % | |||||||
Subordinated debt | 1,411 | 1,264 | 11.63 | % | |||||||
Commercial paper | 635 | 2,388 | -73.41 | % | |||||||
Other borrowings | 7 | 28 | -75.00 | % | |||||||
Total interest expense | 42,952 | 31,054 | 38.31 | % | |||||||
Net interest income | 73,666 | 43,673 | 68.68 | % | |||||||
Provision for loan losses | 9,787 | 365 | >100.00 | % | |||||||
Net interest income after provision for loan losses | 63,879 | 43,308 | 47.50 | % | |||||||
Noninterest Income | |||||||||||
Retail banking fees | 10,546 | 5,671 | 85.96 | % | |||||||
Commissions and fees from fiduciary activities | 2,952 | 2,541 | 16.17 | % | |||||||
Brokerage fee income | 954 | 735 | 29.80 | % | |||||||
Mortgage banking-related fees | 2,836 | 1,846 | 53.63 | % | |||||||
Losses on sale of premises and equipment | (64 | ) | (23 | ) | >100.00 | % | |||||
(Losses) gains on securities available for sale | (95 | ) | 36 | >100.00 | % | ||||||
Losses on sale of foreclosed assets | (2,428 | ) | — | N/A | |||||||
Income from bank owned life insurance | 856 | 366 | >100.00 | % | |||||||
Other operating income | 2,338 | 1,248 | 87.34 | % | |||||||
Total noninterest income | 17,895 | 12,420 | 44.08 | % | |||||||
Noninterest Expense | |||||||||||
Compensation and employee benefits | 34,182 | 20,492 | 66.81 | % | |||||||
Net occupancy | 5,035 | 2,666 | 88.86 | % | |||||||
Supplies and equipment | 5,913 | 3,303 | 79.02 | % | |||||||
Amortization-intangible assets | 1,130 | 485 | >100.00 | % | |||||||
Marketing | 1,813 | 1,122 | 61.59 | % | |||||||
State franchise taxes | 1,535 | 840 | 82.74 | % | |||||||
FDIC insurance | 776 | 115 | 574.78 | % | |||||||
Data processing | 2,801 | 1,349 | >100.00 | % | |||||||
Professional fees | 1,836 | 722 | >100.00 | % | |||||||
Telecommunications | 1,260 | 747 | 68.67 | % | |||||||
Other operating expenses | 10,525 | 5,688 | 85.04 | % | |||||||
Total noninterest expense | 66,806 | 37,529 | 78.01 | % | |||||||
Income before income taxes | 14,968 | 18,199 | -17.75 | % | |||||||
Income tax expense | 4,712 | 5,317 | -11.38 | % | |||||||
Net income | $ | 10,256 | $ | 12,882 | -20.39 | % |
QUARTERLY PERFORMANCE SUMMARY
StellarOne Corporation (NASDAQ: STEL)
(Dollars in thousands)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
9/30/2008 | 9/30/2007 | 9/30/2008 | 9/30/2007 | |||||||||||||
RECONCILIATION TABLE | ||||||||||||||||
Net income | $ | 2,029 | $ | 4,323 | $ | 10,256 | $ | 12,882 | ||||||||
Merger related items, net of tax | 86 | 16 | 1,659 | 179 | ||||||||||||
Other, net of tax (B), (C) | 404 | (51 | ) | 568 | (270 | ) | ||||||||||
Operating Earnings | 2,519 | 4,289 | 12,483 | 12,791 | ||||||||||||
Return on average assets | 0.27 | % | 1.10 | % | 0.50 | % | 1.09 | % | ||||||||
Effect of merger related items, net of tax | 0.01 | % | 0.00 | % | 0.08 | % | 0.02 | % | ||||||||
Effect of other, net of tax (B) | 0.05 | % | -0.01 | % | 0.03 | % | -0.02 | % | ||||||||
Operating return on average assets | 0.33 | % | 1.09 | % | 0.61 | % | 1.09 | % | ||||||||
Return on average equity | 2.21 | % | 10.96 | % | 4.31 | % | 11.19 | % | ||||||||
Effect of merger related items, net of tax | 0.09 | % | 0.04 | % | 0.70 | % | 0.16 | % | ||||||||
Effect of other, net of tax (B) | 0.44 | % | -0.13 | % | 0.24 | % | -0.23 | % | ||||||||
Operating return on average equity | 2.74 | % | 10.87 | % | 5.25 | % | 11.11 | % | ||||||||
Efficiency ratio (taxable equivalent) (A) | 66.63 | % | 64.71 | % | 69.60 | % | 65.04 | % | ||||||||
Effect of merger related items, net of tax | -0.48 | % | 1.49 | % | -1.48 | % | 0.43 | % | ||||||||
Effect of other, net of tax (B) | -1.00 | % | -0.14 | % | -0.64 | % | -0.49 | % | ||||||||
Operating efficiency ratio | 65.15 | % | 66.06 | % | 67.48 | % | 64.98 | % | ||||||||
Basic earnings per share | $ | 0.09 | $ | 0.40 | $ | 0.51 | $ | 1.19 | ||||||||
Effect of merger related items, net of tax | 0.00 | 0.00 | 0.08 | 0.02 | ||||||||||||
Effect of other, net of tax (B) | 0.02 | 0.00 | 0.03 | (0.02 | ) | |||||||||||
Operating basic earnings per share | 0.11 | 0.40 | 0.62 | 1.19 | ||||||||||||
Diluted earnings per share | $ | 0.09 | $ | 0.40 | $ | 0.51 | $ | 1.19 | ||||||||
Effect of merger related items, net of tax | 0.00 | 0.00 | 0.08 | 0.02 | ||||||||||||
Effect of other, net of tax (B) | 0.02 | 0.00 | 0.03 | (0.02 | ) | |||||||||||
Operating diluted earnings per share | 0.11 | 0.40 | 0.62 | 1.19 |
NOTES:
(A) | Computed by dividing non-interest expense by the sum of net interest income and non-interest income, net of gains or losses on securities, fixed assets and foreclosed assets. 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. |
(B) | 2008 reflects nonrecurring professional expenses and an other than temporary impairment charge collectively totaling $404 thousand and $568 thousand for the quarter and nine month period, respectively. The efficiency ratio was only adjusted for professional fees as the adjustment for the other than temporary impairment charge was incorporated within the original calculation of the ratio. |
(C) | 2007 reflects accounting corrections made to a participation loan as well as accrual basis adjustments, both of which are nonrecurring in nature. |
(D) | Individual amounts shown above are calculated from actual, not rounded amounts in the thousands, which appear above. |
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Dollars in thousands)
2008 | 2007 | ||||||||||||||||||||||||||||||||||||
QTD DAYS | 92 | 92 | |||||||||||||||||||||||||||||||||||
QTD MONTHS | 3 | 3 | |||||||||||||||||||||||||||||||||||
Three months ended September 30, | |||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||
2008 | 2007 | ||||||||||||||||||||||||||||||||||||
Dollars in thousands | Average Balance | Interest Inc/Exp | Average Rates | Average Balance | Interest Inc/Exp | Average Rates | Average Balance | Interest Inc/Exp | Average Rates | ||||||||||||||||||||||||||||
$ Change | % Change | $ Change | % Change | bps Change | |||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||
Loans receivable, net | $ | 2,279,282 | $ | 37,744 | 6.59 | % | $ | 1,199,114 | $ | 21,930 | 7.26 | % | 1,080,168 | 90.1 | % | 15,814 | 72.1 | % | (67 | ) | |||||||||||||||||
Investment securities | |||||||||||||||||||||||||||||||||||||
Taxable | 256,426 | 3,155 | 4.81 | % | 165,128 | 1,888 | 4.47 | % | 91,298 | 55.3 | % | 1,267 | 67.1 | % | 34 | ||||||||||||||||||||||
Tax exempt | 86,908 | 1,366 | 6.15 | % | 93,275 | 1,419 | 5.95 | % | (6,367 | ) | -6.8 | % | (53 | ) | -3.7 | % | 20 | ||||||||||||||||||||
Total investments | 343,334 | 4,521 | 5.15 | % | 258,403 | 3,307 | 5.01 | % | 84,931 | 32.9 | % | 1,214 | 36.7 | % | 14 | ||||||||||||||||||||||
Interest bearing deposits | 735 | 3 | 1.60 | % | 545 | 4 | 2.87 | % | 190 | 34.9 | % | (1 | ) | -25.0 | % | (127 | ) | ||||||||||||||||||||
Federal funds sold | 60,406 | 272 | 1.76 | % | 667 | 9 | 5.28 | % | 59,739 | 8956.4 | % | 263 | 2922.2 | % | (352 | ) | |||||||||||||||||||||
404,475 | 4,796 | 4.64 | % | 259,615 | 3,320 | 5.01 | % | 144,860 | 55.8 | % | 1,476 | 44.5 | % | (37 | ) | ||||||||||||||||||||||
Total earning assets | 2,683,757 | $ | 42,540 | 6.30 | % | 1,458,729 | $ | 25,250 | 6.87 | % | 1,225,028 | 84.0 | % | 17,290 | 68.5 | % | (57 | ) | |||||||||||||||||||
Total nonearning assets | 309,093 | 107,662 | 201,431 | 187.1 | % | ||||||||||||||||||||||||||||||||
Total assets | $ | 2,992,850 | $ | 1,566,391 | 1,426,459 | 91.1 | % | ||||||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | |||||||||||||||||||||||||||||||||||||
Interest checking | $ | 507,990 | $ | 439 | 0.34 | % | $ | 172,637 | $ | 46 | 0.11 | % | 335,353 | 194.3 | % | 393 | 854.3 | % | 23 | ||||||||||||||||||
Money market | 232,802 | 1,096 | 1.87 | % | 138,217 | 789 | 2.26 | % | 94,585 | 68.4 | % | 307 | 38.9 | % | (39 | ) | |||||||||||||||||||||
Savings | 202,329 | 1,935 | 3.79 | % | 89,573 | 423 | 1.87 | % | 112,756 | 125.9 | % | 1,512 | 357.4 | % | 192 | ||||||||||||||||||||||
Time deposits: | |||||||||||||||||||||||||||||||||||||
Less than $100,000 | 754,557 | 6,014 | 3.16 | % | 390,529 | 4,105 | 4.17 | % | 364,028 | 93.2 | % | 1,909 | 46.5 | % | (101 | ) | |||||||||||||||||||||
$100,000 and more | 351,678 | 3,355 | 3.78 | % | 194,095 | 2,271 | 4.64 | % | 157,583 | 81.2 | % | 1,084 | 47.7 | % | (86 | ) | |||||||||||||||||||||
Total interest-bearing deposits | 2,049,356 | 12,839 | 2.49 | % | 985,051 | 7,634 | 3.07 | % | 1,064,305 | 108.0 | % | 5,205 | 68.2 | % | (58 | ) | |||||||||||||||||||||
Federal funds purchased and securities sold | (12,949 | ) | -93.2 | % | (186 | ) | -97.9 | % | (370 | ) | |||||||||||||||||||||||||||
under agreements to repurchase | 950 | 4 | 1.65 | % | 13,899 | 190 | 5.35 | % | |||||||||||||||||||||||||||||
Federal Home Loan Bank advances | 194,799 | 1,795 | 3.61 | % | 91,440 | 1,206 | 5.16 | % | 103,359 | 113.0 | % | 589 | 48.8 | % | (155 | ) | |||||||||||||||||||||
Subordinated debt | 32,991 | 481 | 5.71 | % | 20,619 | 426 | 8.08 | % | 12,372 | 60.0 | % | 55 | 12.9 | % | (237 | ) | |||||||||||||||||||||
Commercial paper | — | — | N/A | 76,399 | 844 | 4.32 | % | (76,399 | ) | -100.0 | % | (844 | ) | -100.0 | % | #VALUE! | |||||||||||||||||||||
Other borrowings | 6 | 1 | 65.22 | % | 1,157 | 12 | 4.06 | % | |||||||||||||||||||||||||||||
228,746 | 2,281 | 3.90 | % | 203,514 | 2,678 | 5.15 | % | 25,232 | 12.4 | % | (397 | ) | -14.8 | % | (125 | ) | |||||||||||||||||||||
Total interest-bearing liabilities | 2,278,102 | 15,120 | 2.63 | % | 1,188,565 | 10,312 | 3.43 | % | 1,089,537 | 91.7 | % | 4,808 | 46.6 | % | (80 | ) | |||||||||||||||||||||
Total noninterest-bearing liabilities | 349,662 | 221,368 | 97165 | 128,294 | 58.0 | % | |||||||||||||||||||||||||||||||
(106,349 | ) | ||||||||||||||||||||||||||||||||||||
Total liabilities | 2,627,764 | 1,409,933 | 1110842 | 1,217,831 | 86.4 | % | |||||||||||||||||||||||||||||||
Stockholders’ equity | 365,086 | 156,458 | $ | — | 208,628 | 133.3 | % | ||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,992,850 | $ | 1,566,391 | 1,426,459 | 91.1 | % | ||||||||||||||||||||||||||||||
Net interest income (tax equivalent) | $ | 27,420 | $ | 14,938 | 12,482 | 83.6 | % | ||||||||||||||||||||||||||||||
Average interest rate spread | 3.67 | % | 3.44 | % | 23 | ||||||||||||||||||||||||||||||||
Interest expense as percentage of average earning assets | 2.24 | % | 2.80 | % | (56 | ) | |||||||||||||||||||||||||||||||
Net interest margin | 4.06 | % | 4.07 | % | (1 | ) |
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Dollars in thousands)
2008 | 2007 | ||||||||||||||||||||||||||||||||
YTD DAYS | 274 | 273 | |||||||||||||||||||||||||||||||
YTD MONTHS | 9 | 9 | |||||||||||||||||||||||||||||||
Nine months ended September 30, (unaudited) | |||||||||||||||||||||||||||||||||
2008 | 2007 | ||||||||||||||||||||||||||||||||
Dollars in thousands | Average Balance | Interest Inc/Exp | Average Rates | Average Balance | Interest Inc/Exp | Average Rates | Average Balance | Interest Inc/Exp | Average Rates | ||||||||||||||||||||||||
$ Change | % Change | $ Change | % Change | bps Change | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Loans receivable, net | $ | 2,066,251 | $ | 104,371 | 6.75 | % | $ | 1,209,413 | $ | 66,272 | 7.33 | % | 856,838 | 70.8 | % | 38,099 | 57.5 | % | (58 | ) | |||||||||||||
Investment securities | |||||||||||||||||||||||||||||||||
Taxable | 243,015 | 8,999 | 4.87 | % | 168,024 | 5,697 | 4.47 | % | 74,991 | 44.6 | % | 3,302 | 58.0 | % | 40 | ||||||||||||||||||
Tax exempt | 88,942 | 4,185 | 6.18 | % | 93,996 | 4,295 | 6.03 | % | (5,054 | ) | -5.4 | % | (110 | ) | -2.6 | % | 15 | ||||||||||||||||
Total investments | 331,957 | 13,184 | 5.22 | % | 262,020 | 9,992 | 5.03 | % | 69,937 | 26.7 | % | 3,192 | 31.9 | % | 19 | ||||||||||||||||||
Interest bearing deposits | 1,651 | 16 | 1.27 | % | 516 | 14 | 3.58 | % | 1,135 | 220.0 | % | 2 | 14.3 | % | (231 | ) | |||||||||||||||||
Federal funds sold | 50,113 | 795 | 2.07 | % | 1,710 | 70 | 5.40 | % | 48,403 | 2830.6 | % | 725 | 1035.7 | % | (333 | ) | |||||||||||||||||
383,721 | 13,995 | 4.79 | % | 264,246 | 10,076 | 5.03 | % | 119,475 | 45.2 | % | 3,919 | 38.9 | % | (24 | ) | ||||||||||||||||||
Total earning assets | 2,449,972 | $ | 118,366 | 6.45 | % | 1,473,659 | $ | 76,348 | 6.93 | % | 976,313 | 66.3 | % | 42,018 | 55.0 | % | (48 | ) | |||||||||||||||
Total nonearning assets | 269,254 | 111,812 | 157,442 | 140.8 | % | ||||||||||||||||||||||||||||
Total assets | $ | 2,719,226 | $ | 1,585,471 | 1,133,755 | 71.5 | % | ||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||||||||||||
Interest-bearing deposits | |||||||||||||||||||||||||||||||||
Interest checking | $ | 436,958 | $ | 1,338 | 0.41 | % | $ | 165,530 | $ | 179 | 0.14 | % | 271,428 | 164.0 | % | 1,159 | 647.5 | % | 27 | ||||||||||||||
Money market | 185,302 | 2,578 | 1.85 | % | 155,812 | 2,943 | 2.53 | % | 29,490 | 18.9 | % | (365 | ) | -12.4 | % | (68 | ) | ||||||||||||||||
Savings | 180,276 | 4,731 | 3.50 | % | 93,835 | 1,050 | 1.50 | % | 86,441 | 92.1 | % | 3,681 | 350.6 | % | 200 | ||||||||||||||||||
Time deposits: | |||||||||||||||||||||||||||||||||
Less than $100,000 | 679,507 | 16,974 | 3.33 | % | 401,010 | 12,738 | 4.25 | % | 278,497 | 69.4 | % | 4,236 | 33.3 | % | (92 | ) | |||||||||||||||||
$100,000 and more | 324,088 | 9,880 | 4.06 | % | 203,978 | 7,098 | 4.65 | % | 120,110 | 58.9 | % | 2,782 | 39.2 | % | (59 | ) | |||||||||||||||||
Total interest-bearing deposits | 1,806,131 | 35,501 | 2.62 | % | 1,020,165 | 24,008 | 3.15 | % | 785,966 | 77.0 | % | 11,493 | 47.9 | % | (53 | ) | |||||||||||||||||
Federal funds purchased and securities sold | (5,310 | ) | -52.7 | % | (351 | ) | -84.6 | % | (367 | ) | |||||||||||||||||||||||
under agreements to repurchase | 4,757 | 64 | 1.77 | % | 10,067 | 415 | 5.44 | % | |||||||||||||||||||||||||
Federal Home Loan Bank advances | 205,461 | 5,334 | 3.41 | % | 75,869 | 2,951 | 5.13 | % | |||||||||||||||||||||||||
Subordinated debt | 30,146 | 1,411 | 6.15 | % | 20,619 | 1,264 | 8.08 | % | 9,527 | 46.2 | % | 147 | 11.6 | % | (193 | ) | |||||||||||||||||
Commercial paper | 32,554 | 635 | 2.56 | % | 69,983 | 2,388 | 4.50 | % | (37,429 | ) | -53.5 | % | (1,753 | ) | -73.4 | % | (194 | ) | |||||||||||||||
Other borrowings | 459 | 7 | 2.00 | % | 741 | 28 | 4.98 | % | (282 | ) | -38.1 | % | (21 | ) | -75.0 | % | (298 | ) | |||||||||||||||
273,377 | 7,451 | 3.58 | % | 177,279 | 7,046 | 5.24 | % | 96,098 | 54.2 | % | 405 | 5.7 | % | (166 | ) | ||||||||||||||||||
Total interest-bearing liabilities | 2,079,508 | 42,952 | 2.75 | % | 1,197,444 | 31,054 | 3.46 | % | 882,064 | 73.7 | % | 11,898 | 38.3 | % | (71 | ) | |||||||||||||||||
Total noninterest-bearing liabilities | 321,968 | 234,070 | 87,898 | 37.6 | % | ||||||||||||||||||||||||||||
Total liabilities | 2,401,476 | 1,431,514 | 969,962 | 67.8 | % | ||||||||||||||||||||||||||||
Stockholders’ equity | 317,750 | 153,957 | 163,793 | 106.4 | % | ||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,719,226 | $ | 1,585,471 | 1,133,755 | 71.5 | % | ||||||||||||||||||||||||||
Net interest income (tax equivalent) | $ | 75,414 | $ | 45,294 | |||||||||||||||||||||||||||||
Average interest rate spread | 3.70 | % | 3.47 | % | |||||||||||||||||||||||||||||
Interest expense as percentage of average earning assets | 2.34 | % | 2.82 | % | |||||||||||||||||||||||||||||
Net interest margin | 4.11 | % | 4.11 | % |
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
NORMALIZED BY EXCLUDING PURCHASE ACCOUNTING ADJUSTMENTS
THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Dollars in thousands)
2008 | 2007 | ||||||||||||||||||||||||||||||||||||
QTD DAYS | 92 | 92 | |||||||||||||||||||||||||||||||||||
QTD MONTHS | 3 | 3 | |||||||||||||||||||||||||||||||||||
Three months ended September 30, (unaudited) | |||||||||||||||||||||||||||||||||||||
2008 | 2007 | ||||||||||||||||||||||||||||||||||||
Dollars in thousands | Average Balance | Interest Inc/Exp | Average Rates | Average Balance | Interest Inc/Exp | Average Rates | Average Balance | Interest Inc/Exp | Average Rates | ||||||||||||||||||||||||||||
$ Change | % Change | $ Change | % Change | bps Change | |||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||
Loans receivable, net | $ | 2,283,862 | $ | 36,400 | 6.34 | % | $ | 1,199,114 | $ | 21,930 | 7.26 | % | 1,084,748 | 90.5 | % | 14,470 | 66.0 | % | (92 | ) | |||||||||||||||||
Investment securities | |||||||||||||||||||||||||||||||||||||
Taxable | 256,426 | 3,155 | 4.81 | % | 165,128 | 1,888 | 4.47 | % | 91,298 | 55.3 | % | 1,267 | 67.1 | % | 34 | ||||||||||||||||||||||
Tax exempt | 86,908 | 1,366 | 6.15 | % | 93,275 | 1,419 | 5.95 | % | (6,367 | ) | -6.8 | % | (53 | ) | -3.7 | % | 20 | ||||||||||||||||||||
Total investments | 343,334 | 4,521 | 5.15 | % | 258,403 | 3,307 | 5.01 | % | 84,931 | 32.9 | % | 1,214 | 36.7 | % | 14 | ||||||||||||||||||||||
Interest bearing deposits | 735 | 3 | 1.60 | % | 545 | 4 | 2.87 | % | 190 | 34.9 | % | (1 | ) | -25.0 | % | (127 | ) | ||||||||||||||||||||
Federal funds sold | 60,406 | 272 | 1.76 | % | 667 | 9 | 5.28 | % | 59,739 | 8956.4 | % | 263 | 2922.2 | % | (352 | ) | |||||||||||||||||||||
404,475 | 4,796 | 4.64 | % | 259,615 | 3,320 | 5.01 | % | 144,860 | 55.8 | % | 1,476 | 44.5 | % | (37 | ) | ||||||||||||||||||||||
Total earning assets | 2,688,337 | $ | 41,196 | 6.09 | % | 1,458,729 | $ | 25,250 | 6.87 | % | 1,229,608 | 84.3 | % | 15,946 | 63.2 | % | (78 | ) | |||||||||||||||||||
Total nonearning assets | 306,949 | 107,662 | 199,287 | 185.1 | % | ||||||||||||||||||||||||||||||||
Total assets | $ | 2,995,286 | $ | 1,566,391 | 1,428,895 | 91.2 | % | ||||||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | |||||||||||||||||||||||||||||||||||||
Interest checking | $ | 507,990 | $ | 439 | 0.34 | % | $ | 172,637 | $ | 46 | 0.11 | % | 335,353 | 194.3 | % | 393 | 854.3 | % | 23 | ||||||||||||||||||
Money market | 232,802 | 1,096 | 1.87 | % | 138,217 | 789 | 2.26 | % | 94,585 | 68.4 | % | 307 | 38.9 | % | (39 | ) | |||||||||||||||||||||
Savings | 202,329 | 1,935 | 3.79 | % | 89,573 | 423 | 1.87 | % | 112,756 | 125.9 | % | 1,512 | 357.4 | % | 192 | ||||||||||||||||||||||
Time deposits: | |||||||||||||||||||||||||||||||||||||
Less than $100,000 | 753,411 | 6,926 | 3.65 | % | 390,529 | 4,105 | 4.17 | % | 362,882 | 92.9 | % | 2,821 | 68.7 | % | (52 | ) | |||||||||||||||||||||
$100,000 and more | 351,678 | 3,355 | 3.78 | % | 194,095 | 2,271 | 4.64 | % | 157,583 | 81.2 | % | 1,084 | 47.7 | % | (86 | ) | |||||||||||||||||||||
Total interest-bearing deposits | 2,048,210 | 13,751 | 2.66 | % | 985,051 | 7,634 | 3.07 | % | 1,063,159 | 107.9 | % | 6,117 | 80.1 | % | (41 | ) | |||||||||||||||||||||
Federal funds purchased and securities sold | (12,949 | ) | -93.2 | % | (186 | ) | -97.9 | % | (370 | ) | |||||||||||||||||||||||||||
under agreements to repurchase | 950 | 4 | 1.65 | % | 13,899 | 190 | 5.35 | % | |||||||||||||||||||||||||||||
Federal Home Loan Bank advances | 194,799 | 1,795 | 3.61 | % | 91,440 | 1,206 | 5.16 | % | 103,359 | 113.0 | % | 589 | 48.8 | % | (155 | ) | |||||||||||||||||||||
Subordinated debt | 32,991 | 481 | 5.71 | % | 20,619 | 426 | 8.08 | % | 12,372 | 60.0 | % | 55 | 12.9 | % | (237 | ) | |||||||||||||||||||||
Commercial paper | — | — | N/A | 76,399 | 844 | 4.32 | % | (76,399 | ) | -100.0 | % | (844 | ) | -100.0 | % | #VALUE! | |||||||||||||||||||||
Other borrowings | 6 | 1 | 65.22 | % | 1,157 | 12 | 4.06 | % | |||||||||||||||||||||||||||||
228,746 | 2,281 | 3.90 | % | 203,514 | 2,678 | 5.15 | % | 25,232 | 12.4 | % | (397 | ) | -14.8 | % | (125 | ) | |||||||||||||||||||||
Total interest-bearing liabilities | 2,276,956 | 16,032 | 2.78 | % | 1,188,565 | 10,312 | 3.43 | % | 1,088,391 | 91.6 | % | 5,720 | 55.5 | % | (65 | ) | |||||||||||||||||||||
Total noninterest-bearing liabilities | 350,803 | 221,368 | 97165 | 129,435 | 58.5 | % | |||||||||||||||||||||||||||||||
(106,349 | ) | ||||||||||||||||||||||||||||||||||||
Total liabilities | 2,627,759 | 1,409,933 | 1110842 | 1,217,826 | 86.4 | % | |||||||||||||||||||||||||||||||
Stockholders’ equity | 367,527 | 156,458 | $ | — | 211,069 | 134.9 | % | ||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,995,286 | $ | 1,566,391 | 1,428,895 | 91.2 | % | ||||||||||||||||||||||||||||||
Net interest income (tax equivalent) | $ | 25,164 | $ | 14,938 | 10,226 | 68.5 | % | ||||||||||||||||||||||||||||||
Average interest rate spread | 3.31 | % | 3.44 | % | (13 | ) | |||||||||||||||||||||||||||||||
Interest expense as percentage of average earning assets | 2.37 | % | 2.80 | % | (43 | ) | |||||||||||||||||||||||||||||||
Net interest margin | 3.72 | % | 4.07 | % | (35 | ) |
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
NORMALIZED BY EXCLUDING PURCHASE ACCOUNTING ADJUSTMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Dollars in thousands)
2008 | 2007 | ||||||||||||||||||||||||||||||||
YTD DAYS | 274 | 273 | |||||||||||||||||||||||||||||||
YTD MONTHS | 9 | 9 | |||||||||||||||||||||||||||||||
Nine months ended September 30, | |||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||
2008 | 2007 | ||||||||||||||||||||||||||||||||
Dollars in thousands | Average Balance | Interest Inc/Exp | Average Rates | Average Balance | Interest Inc/Exp | Average Rates | Average Balance | Interest Inc/Exp | Average Rates | ||||||||||||||||||||||||
$ Change | % Change | $ Change | % Change | bps Change | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Loans receivable, net | $ | 2,068,401 | $ | 100,924 | 6.52 | % | $ | 1,209,413 | $ | 66,272 | 7.33 | % | 858,988 | 71.0 | % | 34,652 | 52.3 | % | (81 | ) | |||||||||||||
Investment securities | |||||||||||||||||||||||||||||||||
Taxable | 243,015 | 8,999 | 4.87 | % | 168,024 | 5,697 | 4.47 | % | 74,991 | 44.6 | % | 3,302 | 58.0 | % | 40 | ||||||||||||||||||
Tax exempt | 88,942 | 4,185 | 6.18 | % | 93,996 | 4,295 | 6.03 | % | (5,054 | ) | -5.4 | % | (110 | ) | -2.6 | % | 15 | ||||||||||||||||
Total investments | 331,957 | 13,184 | 5.22 | % | 262,020 | 9,992 | 5.03 | % | 69,937 | 26.7 | % | 3,192 | 31.9 | % | 19 | ||||||||||||||||||
Interest bearing deposits | 1,651 | 16 | 1.27 | % | 516 | 14 | 3.58 | % | 1,135 | 220.0 | % | 2 | 14.3 | % | (231 | ) | |||||||||||||||||
Federal funds sold | 50,113 | 795 | 2.07 | % | 1,710 | 70 | 5.40 | % | 48,403 | 2830.6 | % | 725 | 1035.7 | % | (333 | ) | |||||||||||||||||
383,721 | 13,995 | 4.79 | % | 264,246 | 10,076 | 5.03 | % | 119,475 | 45.2 | % | 3,919 | 38.9 | % | (24 | ) | ||||||||||||||||||
Total earning assets | 2,452,122 | $ | 114,919 | 6.25 | % | 1,473,659 | $ | 76,348 | 6.93 | % | 978,463 | 66.4 | % | 38,571 | 50.5 | % | (68 | ) | |||||||||||||||
Total nonearning assets | 267,104 | 111,812 | 155,292 | 138.9 | % | ||||||||||||||||||||||||||||
Total assets | $ | 2,719,226 | $ | 1,585,471 | 1,133,755 | 71.5 | % | ||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||||||||||||
Interest-bearing deposits | |||||||||||||||||||||||||||||||||
Interest checking | $ | 436,958 | $ | 1,338 | 0.41 | % | $ | 165,530 | $ | 179 | 0.14 | % | 271,428 | 164.0 | % | 1,159 | 647.5 | % | 27 | ||||||||||||||
Money market | 185,302 | 2,578 | 1.85 | % | 155,812 | 2,943 | 2.53 | % | 29,490 | 18.9 | % | (365 | ) | -12.4 | % | (68 | ) | ||||||||||||||||
Savings | 180,276 | 4,731 | 3.50 | % | 93,835 | 1,050 | 1.50 | % | 86,441 | 92.1 | % | 3,681 | 350.6 | % | 200 | ||||||||||||||||||
Time deposits: | |||||||||||||||||||||||||||||||||
Less than $100,000 | 678,144 | 19,714 | 3.87 | % | 401,010 | 12,738 | 4.25 | % | 277,134 | 69.1 | % | 6,976 | 54.8 | % | (38 | ) | |||||||||||||||||
$100,000 and more | 324,088 | 9,880 | 4.06 | % | 203,978 | 7,098 | 4.65 | % | 120,110 | 58.9 | % | 2,782 | 39.2 | % | (59 | ) | |||||||||||||||||
Total interest-bearing deposits | 1,804,768 | 38,241 | 2.82 | % | 1,020,165 | 24,008 | 3.15 | % | 784,603 | 76.9 | % | 14,233 | 59.3 | % | (33 | ) | |||||||||||||||||
Federal funds purchased and securities sold | (5,310 | ) | -52.7 | % | (351 | ) | -84.6 | % | (367 | ) | |||||||||||||||||||||||
under agreements to repurchase | 4,757 | 64 | 1.77 | % | 10,067 | 415 | 5.44 | % | |||||||||||||||||||||||||
Federal Home Loan Bank advances | 205,461 | 5,334 | 3.41 | % | 75,869 | 2,951 | 5.13 | % | |||||||||||||||||||||||||
Subordinated debt | 30,146 | 1,411 | 6.15 | % | 20,619 | 1,264 | 8.08 | % | 9,527 | 46.2 | % | 147 | 11.6 | % | (193 | ) | |||||||||||||||||
Commercial paper | 32,554 | 635 | 2.56 | % | 69,983 | 2,388 | 4.50 | % | (37,429 | ) | -53.5 | % | (1,753 | ) | -73.4 | % | (194 | ) | |||||||||||||||
Other borrowings | 459 | 7 | 2.00 | % | 741 | 28 | 4.98 | % | (282 | ) | -38.1 | % | (21 | ) | -75.0 | % | (298 | ) | |||||||||||||||
273,377 | 7,451 | 3.58 | % | 177,279 | 7,046 | 5.24 | % | 96,098 | 54.2 | % | 405 | 5.7 | % | (166 | ) | ||||||||||||||||||
Total interest-bearing liabilities | 2,078,145 | 45,692 | 2.92 | % | 1,197,444 | 31,054 | 3.46 | % | 880,701 | 73.5 | % | 14,638 | 47.1 | % | (54 | ) | |||||||||||||||||
Total noninterest-bearing liabilities | 322,511 | 234,070 | 88,441 | 37.8 | % | ||||||||||||||||||||||||||||
Total liabilities | 2,400,656 | 1,431,514 | 969,142 | 67.7 | % | ||||||||||||||||||||||||||||
Stockholders’ equity | 318,570 | 153,957 | 164,613 | 106.9 | % | ||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,719,226 | $ | 1,585,471 | 1,133,755 | 71.5 | % | ||||||||||||||||||||||||||
Net interest income (tax equivalent) | $ | 69,227 | $ | 45,294 | |||||||||||||||||||||||||||||
Average interest rate spread | 3.33 | % | 3.47 | % | |||||||||||||||||||||||||||||
Interest expense as percentage of average earning assets | 2.48 | % | 2.82 | % | |||||||||||||||||||||||||||||
Net interest margin | 3.77 | % | 4.11 | % |