CHARLOTTESVILLE, Va., Jan. 28, 2009 (GLOBE NEWSWIRE) -- StellarOne Corporation (Nasdaq:STEL) (StellarOne) today reported a fourth quarter loss and earnings for the full year of 2008. For the fourth quarter, StellarOne incurred a net loss to common shareholders of $898 thousand or $.04 per diluted common share, compared to earnings of $4.1 million or $.38 per diluted share, earned during the fourth quarter of 2007.
O.R. Barham, Jr., President and CEO, commented, "We are disappointed to report a loss for the quarter, but the announced recession and continuing turbulence in the financial markets continue to impact asset quality and resulting earnings. We had several significant charge-offs during the quarter and increased our provision for loan losses to provide an additional level of reserve for loan losses that would be anticipated in a recessionary environment. We are encouraged by the fact that our non-performing assets did not increase measurably during the quarter and past due levels for our commercial and commercial real estate portfolios continue to be modest. However, the real estate construction component of our portfolio continues to be a challenge, and we would anticipate a continuation of elevated provisioning and charge-off activity for 2009."
"As we close the book on 2008, I am incredibly proud of what our company has accomplished this year. We have combined and reengineered two fine companies into a company that is poised to achieve great things. The dedication and commitment of our employees, customers and stockholders gets buried in the numbers, but the fruits of this effort will bear out once market conditions improve. Our strong capital position will be a pillar of strength as we manage through this unprecedented economic climate."
"We are implementing plans to deploy our $30 million in capital invested in StellarOne as part of the U.S. Treasury Capital Purchase Program, including a continuation of lending to businesses and consumers, reduction of foreclosures through a special mortgage refinance program and fixed income investments providing assistance to municipalities."
Prior Year Comparisons Not Meaningful
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.
Earnings for 2008 totaled $9.4 million compared to $17.0 million earned during 2007, a decrease of 44.7%. Diluted earnings per share for 2008 amounted to $.45 per share compared to $1.57 per share during 2007. Operating earnings for 2008 amounted to $11.1 million or $.53 per diluted share, compared to $17.0 million or $1.57 per diluted share for 2007. Operating earnings exclude the after-tax effects of merger-related integration expenses and other-than-temporary impairments.
Nonperforming Asset Levels Stable, But Asset Quality Challenges Continue
StellarOne's ratio of non-performing assets as a percentage of total assets remained elevated at 1.66% as of December 31, 2008, compared to 1.65% as of September 30, 2008. This is a result of continued declining market conditions in general. Reductions in non-performing assets were offset by a downgrade of one significant commercial business relationship of $7.1 million to nonaccrual status near the end of the period. Annualized net charge-offs as a percentage of average loans receivable amounted to 2.22% for the fourth quarter of 2008, compared to .44% for the third quarter of 2008. Charge-offs of $6.2 million or 49% of net charge-offs for the quarter were concentrated in two construction and development relationships.
StellarOne recorded a provision for loan losses of $11.0 million for the fourth quarter of 2008, an increase of $5.0 million compared to the third quarter of 2008. The fourth quarter provision compares to net charge-offs of $12.6 million for the quarter, allowing only a minimal decrease in the allowance as a percentage of total loans from 1.40% at September 30 to 1.35% at December 31, 2008, while continuing to maintain reserves commensurate with the loan portfolio's inherent risk. While it is difficult to predict the impact or length of the recessionary economy, StellarOne anticipates further increases to non-performing assets and net charge-offs for 2009.
Already Strong Capital Levels Benefit from TARP Participation
StellarOne's strong capital base was enhanced by $30 million in Treasury Capital Purchase Program proceeds received late in the fourth quarter, increasing both tangible equity and Tier 1 risk-based regulatory capital for the fourth quarter of 2008. Tangible equity as a percentage of tangible assets was 10.79% at December 31, 2008 compared to 9.65% at September 30, 2008. Tier 1 risk-based capital ratio was 14.07% at December 31, 2008 compared to 12.94% at September 30, 2008. Both ratios are well in excess of the median for its peer group. Shareholder's equity, including preferred stock issued in connection with participation in the TARP program, represented 13.35% of total assets at December 31, while book value per common share at December 31, 2008 was $16.14 per share.
Wealth Management and Mortgage Revenues Weigh on Fee Based Revenue Results
On an operating basis, which excludes gains and losses from sale of assets, total non-interest income amounted to $6.5 million for the fourth quarter of 2008, a decrease of $587 thousand or 8.3% from $7.1 million for third quarter of 2008. Retail banking fee income amounted to $4.2 million for the fourth quarter, an increase of $127 thousand or 3.1% compared to $4.1 million for the third quarter of 2008. Mortgage banking revenue totaled $610 thousand for the fourth quarter and was relatively flat when compared to $607 thousand for the third quarter. Revenues from trust and brokerage for the fourth quarter of 2008 were $1.0 million, down $259 thousand or 19.9% compared to $1.3 million in the third quarter of 2008 on lower market valuations for assets under management. Despite revenue contraction, both mortgage and wealth management contributed earnings to the company for 2008. Revenues from other miscellaneous income sources for the fourth quarter of 2008 were $325 thousand, down $412 thousand or 55.9% compared to $737 thousand for third quarter 2008, related to decreases in title insurance and merchant processing revenues.
Operating Costs Contract
Non-interest expense for the fourth quarter of 2008 amounted to $22.1 million, a decrease of $1.1 million or 4.8% compared to the $23.2 million for the third quarter of 2008. Reductions in compensation and benefits of $686 thousand and professional fees of $458 thousand accounted for much of this decrease. StellarOne's efficiency ratio was 69.23% for the fourth quarter of 2008, compared to 66.63% for the third quarter of 2008. Excluding the effects of nonrecurring items per above, the efficiency ratio was 68.21% for the fourth quarter compared to 65.15% for third quarter of 2008.
Stable Balance Sheet with Strong Liquidity
Average loans for the fourth quarter of 2008 were $2.28 billion, essentially flat with that of third quarter 2008. Average securities were $355.9 million for the fourth quarter of 2008, up $12.6 million or 3.7% from $343.3 million for the third quarter of 2008. Average deposits for the fourth quarter were $2.34 billion, down $56.0 million or 2.4% from $2.40 billion for the third quarter of 2008. Average balance declines in non-interest bearing deposits and jumbo certificates of deposit account for most of this decrease. Total average earning assets were $2.65 billion for the fourth quarter of 2008, down $33.2 million or 1.2% compared to $2.68 billion for the third quarter of 2008. At December 31, 2008, total assets were $2.96 billion, compared to $2.99 billion at September 30, 2008. Cash and cash equivalents were $116.3 million at December 31, 2008, an increase of $35.4 million or 43.8% compared to $80.8 million at September 30, 2008. Shareholder's equity at December 31, 2008 was $394.8 million, an increase of $29.8 million or 8.2% compared to September 30, 2008.
Core Margin Experiences Moderate Compression
Net interest income, on a tax-equivalent basis and excluding the effects of purchase accounting amortization, amounted to $23.7 million for the fourth quarter of 2008, down $1.5 million or 6.0% compared to $25.2 million for the third quarter of 2008. The core net interest margin, adjusted to exclude the effect of purchasing accounting amortization, was 3.55% for the fourth quarter 2008, compared to 3.72% for the third quarter of 2008. Including the effects of purchase accounting adjustments, the net interest margin was 3.80% for the fourth quarter 2008, compared to 4.06% for the third quarter of 2008. The compression was yield driven, with the average yield on earning assets decreasing to 6.03% as compared to 6.30% for the third quarter of 2008. The pricing structure for approximately 34% of the company's loan portfolio is tied to the LIBOR and Prime rate indices. Both of these indices have declined sharply since the end of the third quarter and have triggered a lower rate of return on the company's variable rate loan products which resulted in decreased yield. The cost of interest bearing liabilities remained relatively flat for the same periods.
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 its sole affiliate, StellarOne Bank, StellarOne operates 62 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 provide 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 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.
SELECTED FINANCIAL DATA
StellarOne Corporation (Nasdaq:STEL)
(Dollars in thousands, except per share data)
--------------------------------------------------------------------
SUMMARY INCOME Three Months Ended Twelve Months Ended
STATEMENT December December
----------------- ------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
Interest income
- taxable
equivalent $ 40,206 $ 24,973 $ 158,571 $ 101,322
Interest expense 14,869 10,335 57,821 41,390
----------- ----------- ----------- -----------
Net interest
income -
taxable
equivalent 25,337 14,638 100,750 59,932
Less: taxable
equivalent
adjustment 588 542 2,335 1,621
----------- ----------- ----------- -----------
Net interest
income 24,749 14,096 98,415 57,769
Provision for
loan and lease
losses 11,000 1,674 20,787 2,040
----------- ----------- ----------- -----------
Net interest
income after
provision for
loan and lease
losses 13,749 12,422 77,628 55,729
Noninterest
income 6,396 4,969 24,291 16,967
Noninterest
expense 22,054 11,733 88,860 48,841
(Benefit)
provision for
income taxes (1,064) 1,537 3,648 6,853
----------- ----------- ----------- -----------
Net (loss)
income $ (845) $ 4,121 $ 9,411 $ 17,002
=========== =========== =========== ===========
Dividends and
accretion on
preferred stock (53) -- (53) --
Net (loss)
income
available to
common
shareholders $ (898) $ 4,121 $ 9,358 $ 17,002
=========== =========== =========== ===========
Earnings (Loss)
per share
available to
common
shareholders
Basic $ (0.04) $ 0.38 $ 0.45 $ 1.58
Diluted $ (0.04) $ 0.38 $ 0.45 $ 1.57
SUMMARY AVERAGE Three Months Ended Twelve Months Ended
BALANCE SHEET December December
----------------- ------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
Total loans $ 2,280,419 $1,214,274 $2,120,085 $1,210,638
Total securities 355,929 245,601 337,983 257,881
Total earning
assets 2,650,566 1,460,908 2,500,555 1,470,445
Total assets 2,954,526 1,576,586 2,778,121 1,583,182
Total deposits 2,324,441 1,166,587 2,163,740 1,224,094
Shareholders'
Equity 367,997 160,745 330,381 155,668
PERFORMANCE Three Months Ended Twelve Months Ended
RATIOS December December
----------------- ------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
Return on
average assets -0.11% 1.04% 0.34% 1.07%
Return on
average equity -0.91% 10.17% 2.85% 10.92%
Return on
average
realized
equity (A) -0.91% 10.20% 2.84% 10.88%
Net interest
margin (taxable
equivalent) 3.80% 3.98% 4.03% 4.08%
Efficiency
(taxable
equivalent) (B) 69.23% 63.18% 69.56% 64.39%
CREDIT QUALITY Three Months Ended Twelve Months Ended
December December
----------------- ------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
Allowance for
loan losses:
Beginning of
period $ 32,101 $ 14,617 $ 15,082 $ 14,500
Provision for
loan losses 11,000 1,674 20,787 2,040
Charge-offs (12,979) (1,329) (18,191) (1,762)
Recoveries 342 120 1,247 304
----------- ----------- ----------- -----------
Net charge-offs (12,637) (1,209) (16,944) (1,458)
Allowance
acquired via
acquisition -- -- 11,539 --
----------- ----------- ----------- -----------
End of period $ 30,464 $ 15,082 $ 30,464 $ 15,082
=========== =========== =========== ===========
Twelve Months Ended
December 31 December
------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
Total
non-performing
assets $ 49,118 $ 6,964
Nonperforming
assets as a %
of total assets: 1.66% 0.44%
Nonperforming
assets as a %
of loans plus
foreclosed
assets 2.17% 0.57%
Allowance for
loan losses as
a % of total
loans 1.35% 1.23%
Net charge-offs
as a % of
average loans
outstanding 2.22% 0.10% 0.80% 0.12%
CAPITAL MANAGEMENT December 31
----------------- ------------------------
2008 2007
----------- -----------
Risk based
capital ratios
Tier 1 14.07% 12.05%
Tangible equity
ratio 10.79% 9.04%
Tangible common
equity ratio 9.75% 9.04%
Period end
shares issued
and outstanding 22,605,063 10,795,943
Three Months Ended Twelve Months Ended
December December
------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
Shares issued 5,840 846 11,809,120 11,640
Average
common shares
issued and
outstanding 22,601,965 10,795,877 20,725,650 10,793,177
Average diluted
common shares
issued and
outstanding 22,665,604 10,817,458 20,794,127 10,817,127
Dividends paid
per common
share $ 0.16 $ 0.16 $ 0.64 $ 0.64
SUMMARY ENDING
BALANCE SHEET December 31
----------------- ------------------------
2008 2007
----------- -----------
Total loans $2,263,291 $1,226,589
Total securities 327,346 230,226
Total earning
assets 2,613,592 1,463,959
Total assets 2,956,514 1,594,818
Total deposits 2,323,108 1,142,547
Shareholders'
Equity 394,785 162,768
Book value per
share $ 17.46 $ 15.08
OTHER DATA
End of period
full time
employees 846 496
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)
SELECTED BALANCE SHEET DATA
For the
Three Months Ended
12/31/2008 12/31/2007
---------- ----------
Assets
Cash and cash equivalents $ 116,276 $ 41,793
Securities available for sale 326,426 227,569
Securities held to maturity 920 2,657
Total securities 327,346 230,226
Mortgage loans held for sale 15,847 5,354
Real estate - construction 358,587 199,281
Real estate - 1-4
family residential 764,811 331,029
Real estate - commercial
and multifamily 840,811 538,776
Commercial, financial
and agricultural 225,637 125,410
Consumer loans 58,075 26,169
All other loans 15,370 5,924
Total loans 2,263,291 1,226,589
Deferred loan costs 1,295 1,088
Allowance for loan losses (30,464) (15,082)
Net loans 2,234,122 1,212,595
Premises and equipment, net 89,022 37,307
Core deposit intangibles, net 10,266 3,225
Goodwill 74,582 13,896
Bank owned life insurance 28,903 10,725
Foreclosed assets 4,627 3,031
Other assets 55,523 36,666
Total assets 2,956,514 1,594,818
Liabilities
Deposits:
Noninterest bearing deposits 307,621 204,774
Money market &
interest checking 742,212 306,983
Savings 187,448 78,626
CD's and other time deposits 1,085,827 552,164
Total deposits 2,323,108 1,142,547
Federal funds purchased
and securities sold under
agreements to repurchase 699 20,000
Federal Home Loan Bank advances 187,700 169,000
Subordinated debt 32,991 20,619
Commercial paper -- 68,745
Other borrowings -- 892
Other liabilities 17,231 10,247
Total liabilities 2,561,729 1,432,050
Stockholders' equity
Preferred stock 24,496 --
Common stock 22,605 10,796
Additional paid-in capital 231,333 34,488
Retained earnings 115,475 117,009
Accumulated other comprehensive
income, net 876 475
Total stockholders' equity 394,785 162,768
Total liabilities and
stockholders' equity $2,956,514 $1,594,818
QUARTERLY PERFORMANCE SUMMARY
StellarOne Corporation (Nasdaq:STEL)
(Dollars in thousands)
For the Percent
Three Months Ended Increase
12/31/2008 12/31/2007 (Decrease)
--------- --------- ---------
Interest Income
Loans, including fees $ 35,603 $ 21,747 63.71%
Federal funds sold and deposits
in other banks 93 12 >100.00%
Investment securities:
Taxable 2,882 1,567 83.92%
Tax-exempt 865 934 -7.39%
Dividends 175 171 2.34%
Total interest income 39,618 24,431 62.16%
Interest Expense
Deposits 12,437 7,544 64.86%
Federal funds repurchased and
securities sold under agreements
to repurchase 9 216 -95.83%
Federal Home Loan Bank advances 1,873 1,393 34.46%
Subordinated debt 549 419 31.03%
Commercial paper -- 752 -100.00%
Other borrowings 1 11 -90.91%
Total interest expense 14,869 10,335 43.87%
Net interest income 24,749 14,096 75.57%
Provision for loan losses 11,000 1,674 >100.00%
Net interest income after
provision for loan losses 13,749 12,422 10.68%
Noninterest Income
Retail banking fees 4,210 2,052 >100.00%
Commissions and fees from
fiduciary activities 725 834 -13.07%
Brokerage fee income 316 175 80.57%
Mortgage banking-related fees 610 593 2.87%
(Losses) gains on sale of
premises and equipment (60) 1,035 >100.00%
Gains (losses) on securities
available for sale 6 (1) >100.00%
Losses on sale of
foreclosed assets (68) -- N/A
Income from bank owned
life insurance 332 128 >100.00%
Other operating income 325 153 >100.00%
Total noninterest income 6,396 4,969 28.72%
Noninterest Expense
Compensation and employee benefits 10,565 6,132 72.29%
Net occupancy 2,078 918 >100.00%
Supplies and equipment 1,997 1,103 81.05%
Amortization-intangible assets 438 161 >100.00%
Marketing 370 419 -11.69%
State franchise taxes 556 298 86.58%
FDIC insurance 643 35 >100.00%
Data processing 1,045 446 >100.00%
Professional fees 164 298 -44.97%
Telecommunications 502 236 >100.00%
Other operating expenses 3,696 1,687 >100.00%
Total noninterest expense 22,054 11,733 87.97%
(Loss) income before income taxes (1,909) 5,658 >100.00%
Income tax (benefit) expense (1,064) 1,537 >100.00%
Net (loss) income $ (845) $ 4,121 >100.00%
QUARTERLY PERFORMANCE SUMMARY
StellarOne Corporation (Nasdaq:STEL)
(Dollars in thousands)
For the Percent
Three Months Ended Increase
12/31/2008 12/31/2007 (Decrease)
--------- --------- ---------
Interest Income
Loans, including fees $ 139,692 $ 87,902 58.92%
Federal funds sold and deposits
in other banks 968 96 >100.00%
Investment securities:
Taxable 10,921 6,853 59.36%
Tax-exempt 3,585 3,726 -3.78%
Dividends 1,070 582 83.85%
Total interest income 156,236 99,159 57.56%
Interest Expense
Deposits 47,939 31,551 51.94%
Federal funds purchased and
securities sold under agreements
to repurchase 73 630 -88.41%
Federal Home Loan Bank advances 7,207 4,345 65.87%
Subordinated debt 1,959 1,684 16.33%
Commercial paper 635 3,141 -79.78%
Other borrowings 8 39 -79.49%
Total interest expense 57,821 41,390 39.70%
Net interest income 98,415 57,769 70.36%
Provision for loan losses 20,787 2,040 >100.00%
Net interest income after
provision for loan losses 77,628 55,729 39.30%
Noninterest Income
Retail banking fees 14,756 7,724 91.04%
Commissions and fees from
fiduciary activities 3,677 3,375 8.95%
Brokerage fee income 1,269 909 39.60%
Mortgage banking-related fees 3,446 2,439 41.29%
(Losses) gains on sale of
premises and equipment (124) 1,013 >100.00%
(Losses) gains on securities
available for sale (88) 35 >100.00%
Losses on sale of foreclosed assets (2,497) (1) >100.00%
Income from bank owned
life insurance 1,213 494 >100.00%
Other operating income 2,639 979 >100.00%
Total noninterest income 24,291 16,967 43.17%
Noninterest Expense
Compensation and employee benefits 44,747 26,422 69.36%
Net occupancy 7,113 3,570 99.24%
Supplies and equipment 7,910 4,383 80.47%
Amortization-intangible assets 1,568 646 >100.00%
Marketing 2,184 1,533 42.47%
State franchise taxes 2,091 1,138 83.74%
FDIC insurance 1,419 150 >100.00%
Data processing 3,847 1,794 >100.00%
Professional fees 2,000 1,005 99.00%
Telecommunications 1,761 976 80.43%
Other operating expenses 14,220 7,224 96.84%
Total noninterest expense 88,860 48,841 81.94%
Income before income taxes 13,059 23,855 -45.26%
Income tax expense 3,648 6,853 -46.77%
Net income $ 9,411 $ 17,002 -44.65%
QUARTERLY PERFORMANCE SUMMARY
StellarOne Corporation (Nasdaq:STEL)
(Dollars in thousands)
For the Twelve Months Ended
12/31/2008 12/31/2007
---------- ----------
Net income $ 9,411 $ 17,002
Merger expense, net of tax 1,663 370
Other, net of tax (B), (C) 49 (361)
Operating Earnings 11,123 17,011
-----------------------------------------------------------------
Return on average assets 0.34% 1.07%
Effect of merger related items,
net of tax 0.06% -0.02%
Effect of other, net of tax (B) 0.00% 0.02%
Operating return on average assets 0.40% 1.07%
-----------------------------------------------------------------
Return on average equity 2.85% 10.92%
Effect of merger related items,
net of tax 0.51% -0.23%
Effect of other, net of tax (B) 0.01% 0.24%
Operating return on average equity 3.37% 10.93%
-----------------------------------------------------------------
Efficiency ratio (taxable equivalent)(A) 69.56% 64.39%
Effect of merger related items,
net of tax -1.51% 0.48%
Effect of other, net of tax (B) 0.16% -0.76%
Operating efficiency ratio 68.21% 64.11%
-----------------------------------------------------------------
Basic earnings per share $ 0.45 $ 1.58
Effect of merger related items,
net of tax 0.08 0.03
Effect of other, net of tax (B) -- (0.03)
Operating basic earnings per share 0.53 1.58
-----------------------------------------------------------------
Diluted earnings per share $ 0.45 $ 1.57
Effect of merger related items, 0.08 0.03
net of tax
Effect of other, net of tax (B) -- (0.03)
Operating diluted earnings per share 0.53 1.57
NOTES:
Operating earnings is only being presented for the full year as
the effects of these items on the current quarter were
nominal.
(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 investorswith 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 net of any
related recoveries and an other than temporary impairment
charge. 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.
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
THREE MONTHS ENDED DECEMBER 31, 2008 AND 2007
(Dollars in thousands)
Three months ended December 30,
(unaudited)
--------------------------------
2008
--------------------------------
Average Interest Average
Dollars in thousands Balance Inc/Exp Rates
----------------------------------- ---------- ---------- -----
Assets
Loans receivable,
net $2,280,419 $ 35,725 6.23%
Investment securities
Taxable 271,336 3,083 4.45%
Tax exempt 84,593 1,331 6.16%
---------- ---------- -----
Total investments 355,929 4,414 4.85%
Interest bearing deposits 926 10 4.23%
Federal funds sold 13,292 57 1.68%
---------- ---------- -----
370,147 4,481 4.73%
---------- ----------
Total earning assets 2,650,566 $ 40,206 6.03%
==========
Total nonearning assets 303,960
----------
Total assets $2,954,526
==========
Liabilities and Stockholders' Equity
Interest-bearing deposits
Interest checking $ 503,879 $ 303 0.24%
Money market 224,129 910 1.61%
Savings 192,396 1,853 3.82%
Time deposits:
Less than $100,000 759,215 6,179 3.23%
$100,000 and more 333,315 3,193 3.80%
---------- ---------- -----
Total interest-bearing deposits 2,012,934 12,438 2.45%
Federal funds purchased and
securities sold under agreements
to repurchase 2,928 9 1.20%
Federal Home Loan Bank advances 206,848 1,873 3.54%
Subordinated debt 32,991 549 6.51%
Commercial paper -- -- N/A
Other borrowings -- -- N/A
---------- ---------- -----
242,767 2,431 3.92%
---------- ---------- -----
Total interest-bearing
liabilities 2,255,701 14,869 2.61%
==========
Total noninterest-bearing
liabilities 330,828
----------
Total liabilities 2,586,529
Stockholders' equity 367,997
----------
Total liabilities and stockholders'
equity $2,954,526
==========
Net interest income (tax equivalent) $ 25,337
----------
Average interest rate spread 3.42%
Interest expense as percentage of
average earning assets 2.23%
Net interest margin 3.80%
Three months ended December 30,
(unaudited)
--------------------------------
2007
--------------------------------
Average Interest Average
Dollars in thousands Balance Inc/Exp Rates
----------------------------------- ---------- ---------- -----
Assets
Loans receivable, net $1,214,274 $ 21,786 7.12%
Investment securities
Taxable 151,455 1,738 4.49%
Tax exempt 94,146 1,437 5.97%
---------- ---------- -----
Total investments 245,601 3,175 5.06%
Interest bearing deposits 376 4 4.16%
Federal funds sold 657 8 4.76%
---------- ---------- -----
246,634 3,187 5.06%
---------- ----------
Total earning assets 1,460,908 $ 24,973 6.78%
==========
Total nonearning assets 115,678
----------
Total assets $1,576,586
==========
Liabilities and Stockholders' Equity
Interest-bearing deposits
Interest checking $ 185,150 $ 512 1.10%
Money market 122,022 706 2.30%
Savings 84,809 137 0.64%
Time deposits:
Less than $100,000 374,927 3,861 4.09%
$100,000 and more 193,877 2,328 4.76%
---------- ---------- -----
Total interest-bearing deposits 960,785 7,544 3.12%
Federal funds purchased and
securities sold under agreements
to repurchase 17,149 216 4.93%
Federal Home Loan Bank advances 123,441 1,393 4.42%
Subordinated debt 20,619 419 7.95%
Commercial paper 76,181 752 3.86%
Other borrowings 863 11 4.99%
---------- ---------- -----
238,253 2,791 4.58%
---------- ---------- -----
Total interest-bearing
liabilities 1,199,038 10,335 3.41%
==========
Total noninterest-bearing
liabilities 216,803
----------
Total liabilities 1,415,841
Stockholders' equity 160,745
----------
Total liabilities and stockholders'
equity $1,576,586
==========
Net interest income (tax equivalent) $ 14,638
==========
Average interest rate spread 3.37%
Interest expense as percentage of
average earning assets 2.81%
Net interest margin 3.98%
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
TWELVE MONTHS ENDED DECEMBER 31, 2008 AND 2007
(Dollars in thousands)
Twelve months ended December 31,
(unaudited)
------------------------------------
2008
------------------------------------
Average Interest Average
Dollars in thousands Balance Inc/Exp Rates
-------------------- ---------- ---------- ----------
Assets
Loans receivable, net $2,120,085 $ 140,097 6.61%
Investment securities
Taxable 250,134 12,081 4.75%
Tax exempt 87,849 5,516 6.18%
---------- ---------- ----------
Total investments 337,983 17,597 5.12%
Interest bearing deposits 1,469 25 1.67%
Federal funds sold 41,018 852 2.04%
---------- ---------- ----------
380,470 18,474 4.77%
---------- ---------- ----------
Total earning assets 2,500,555 $ 158,571 6.34%
==========
Total nonearning assets 277,566
----------
Total assets $2,778,121
==========
Liabilities and Stockholders'
Equity
Interest-bearing deposits
Interest checking $ 453,780 $ 1,640 0.36%
Money market 195,061 3,488 1.78%
Savings 183,323 6,584 3.58%
Time deposits:
Less than $100,000 699,543 23,153 3.30%
$100,000 and more 326,407 13,073 3.99%
---------- ---------- ----------
Total interest-bearing deposits 1,858,114 47,938 2.57%
Federal funds purchased and
securities sold under
agreements to repurchase 4,297 73 1.67%
Federal Home Loan Bank advances 205,810 7,207 3.44%
Subordinated debt 30,861 1,960 6.25%
Commercial paper 24,371 635 2.56%
Other borrowings 343 8 2.29%
---------- ---------- ----------
265,682 9,883 3.66%
---------- ---------- ----------
Total interest-bearing
liabilities 2,123,796 57,821 2.71%
==========
Total noninterest-bearing
liabilities 323,944
-----------
Total liabilities 2,447,740
Stockholders' equity 330,381
-----------
Total liabilities and
stockholders' equity $2,778,121
==========
Net interest income
(tax equivalent) $ 100,750
==========
Average interest rate spread 3.63%
Interest expense as percentage
of average earning assets 2.31%
Net interest margin 4.03%
Twelve months ended December 31,
(unaudited)
-----------------------------------
2007
-----------------------------------
Average Interest Average
Dollars in thousands Balance Inc/Exp Rates
-------------------- --------- ---------- ----------
Assets
Loans receivable, net $1,210,638 $ 88,059 7.27%
Investment securities
Taxable 163,847 7,435 4.48%
Tax exempt 94,034 5,732 6.01%
---------- ---------- ----------
Total investments 257,881 13,167 5.04%
Interest bearing deposits 481 18 3.69%
Federal funds sold 1,445 78 5.32%
---------- ---------- ----------
259,807 13,263 5.04%
---------- ---------- ----------
Total earning assets 1,470,445 $ 101,322 6.89%
==========
Total nonearning assets 112,737
----------
Total assets $1,583,182
==========
Liabilities and Stockholders'
Equity
Interest-bearing deposits
Interest checking $ 170,475 $ 1,312 0.77%
Money market 147,295 3,649 2.48%
Savings 91,560 565 0.62%
Time deposits:
Less than $100,000 394,436 16,599 4.21%
$100,000 and more 201,432 9,426 4.68%
---------- ---------- ----------
Total interest-bearing deposits 1,005,198 31,551 3.14%
Federal funds purchased and
securities sold under
agreements to repurchase 11,852 630 5.24%
Federal Home Loan Bank advances 87,860 4,345 4.88%
Subordinated debt 20,619 1,684 8.06%
Commercial paper 71,545 3,141 4.33%
Other borrowings 772 39 4.98%
---------- ---------- ----------
192,648 9,839 5.04%
---------- ---------- ----------
Total interest-bearing
liabilities 1,197,846 41,390 3.45%
==========
Total noninterest-bearing
liabilities 229,668
---------
Total liabilities 1,427,514
Stockholders' equity 155,668
----------
Total liabilities and
stockholders' equity $1,583,182
==========
Net interest income
(tax equivalent) $ 59,932
==========
Average interest rate spread 3.44%
Interest expense as percentage
of average earning assets 2.81%
Net interest margin 4.08%
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
NORMALIZED BY EXCLUDING PURCHASE ACCOUNTING ADJUSTMENTS
THREE MONTHS ENDED DECEMBER 31, 2008 AND 2007
(Dollars in thousands)
Three months ended December 30,
(unaudited)
------------------------------
2008
------------------------------
Average Interest Average
Dollars in thousands Balance Inc/Exp Rates
------------------------------------- ---------- -------- -----
Assets
Loans receivable, net $2,283,708 $ 34,583 6.02%
Investment securities
Taxable 271,336 3,083 4.45%
Tax exempt 84,593 1,331 6.16%
---------- -------- -----
Total investments 355,929 4,414 4.85%
Interest bearing deposits 926 10 4.23%
Federal funds sold 13,292 57 1.68%
---------- -------- -----
370,147 4,481 4.73%
---------- --------
Total earning assets 2,653,855 $ 39,064 5.85%
========
Total nonearning assets 303,960
----------
Total assets $2,957,815
==========
Liabilities and Stockholders' Equity
Interest-bearing deposits
Interest checking $ 503,879 $ 303 0.24%
Money market 224,129 910 1.61%
Savings 192,396 1,853 3.82%
Time deposits:
Less than $100,000 758,830 6,701 3.50%
$100,000 and more 333,315 3,193 3.80%
---------- -------- -----
Total interest-bearing deposits 2,012,549 12,960 2.55%
Federal funds purchased and
securities sold under agreements
to repurchase 2,928 9 1.20%
Federal Home Loan Bank advances 206,848 1,873 3.54%
Subordinated debt 32,991 549 6.51%
Commercial paper -- -- N/A
Other borrowings -- -- N/A
---------- -------- -----
242,767 2,431 3.92%
---------- -------- -----
Total interest-bearing
liabilities 2,255,316 15,391 2.70%
========
Total noninterest-bearing
liabilities 330,828
----------
Total liabilities 2,586,144
Stockholders' equity 367,997
----------
Total liabilities and stockholders'
equity $2,954,141
==========
Net interest income (tax equivalent) $ 23,673
========
Average interest rate spread 3.15%
Interest expense as percentage of
average earning assets 2.30%
Net interest margin 3.55%
Three months ended December 30,
(unaudited)
------------------------------
2007
------------------------------
Average Interest Average
Dollars in thousands Balance Inc/Exp Rates
------------------------------------- ---------- -------- -----
Assets
Loans receivable,
net $1,214,274 $ 21,786 7.12%
Investment securities
Taxable 151,455 1,738 4.49%
Tax exempt 94,146 1,437 5.97%
---------- -------- -----
Total investments 245,601 3,175 5.06%
Interest bearing deposits 376 4 4.16%
Federal funds sold 657 8 4.76%
---------- -------- -----
246,634 3,187 5.06%
---------- --------
Total earning assets 1,460,908 $ 24,973 6.78%
========
Total nonearning assets 115,678
----------
Total assets $1,576,586
==========
Liabilities and Stockholders' Equity
Interest-bearing deposits
Interest checking $ 185,150 $ 512 1.10%
Money market 122,022 706 2.30%
Savings 84,809 137 0.64%
Time deposits:
Less than $100,000 374,927 3,861 4.09%
$100,000 and more 193,877 2,328 4.76%
---------- -------- -----
Total interest-bearing deposits 960,785 7,544 3.12%
Federal funds purchased and
securities sold under agreements
to repurchase 17,149 216 4.93%
Federal Home Loan Bank advances 123,441 1,393 4.42%
Subordinated debt 20,619 419 7.95%
Commercial paper 76,181 752 3.86%
Other borrowings 863 11 4.99%
---------- -------- -----
238,253 2,791 4.58%
---------- -------- -----
Total interest-bearing
liabilities 1,199,038 10,335 3.41%
========
Total noninterest-bearing
liabilities 216,803
----------
Total liabilities 1,415,841
Stockholders' equity 160,745
----------
Total liabilities and stockholders'
equity $1,576,586
==========
Net interest income (tax equivalent) $ 14,638
========
Average interest rate spread 3.37%
Interest expense as percentage of
average earning assets 2.81%
Net interest margin 3.98%
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
NORMALIZED BY EXCLUDING PURCHASE ACCOUNTING ADJUSTMENTS
TWELVE MONTHS ENDED DECEMBER 31, 2008 AND 2007
(Dollars in thousands)
Twelve months ended December 31,
(unaudited)
------------------------------------
2008
------------------------------------
Average Interest Average
Dollars in thousands Balance Inc/Exp Rates
-------------------- ---------- ---------- ----------
Assets
Loans receivable, net $2,122,521 $ 135,508 6.39%
Investment securities
Taxable 250,134 12,081 4.75%
Tax exempt 87,849 5,516 6.18%
---------- ---------- ----------
Total investments 337,983 17,597 5.12%
Interest bearing deposits 1,469 25 1.67%
Federal funds sold 41,018 852 2.04%
---------- ---------- ----------
380,470 18,474 4.77%
---------- ---------- ----------
Total earning assets 2,502,991 $ 153,982 6.16%
==========
Total nonearning assets 277,566
----------
Total assets $2,780,557
==========
Liabilities and Stockholders'
Equity
Interest-bearing deposits
Interest checking $ 453,780 $ 1,640 0.36%
Money market 195,061 3,488 1.78%
Savings 183,323 6,584 3.58%
Time deposits:
Less than $100,000 698,426 26,414 3.77%
$100,000 and more 326,407 13,073 3.99%
---------- ---------- ----------
Total interest-bearing
deposits 1,856,997 51,199 2.75%
Federal funds purchased and
securities sold under
agreements to repurchase 4,297 73 1.67%
Federal Home Loan Bank
advances 205,810 7,207 3.44%
Subordinated debt 30,861 1,960 6.25%
Commercial paper 24,371 635 2.56%
Other borrowings 343 8 2.29%
---------- ---------- ----------
265,682 9,883 3.66%
---------- ---------- ----------
Total interest-bearing
liabilities 2,122,679 61,082 2.86%
==========
Total noninterest-bearing
liabilities 323,944
----------
Total liabilities 2,446,623
Stockholders' equity 330,381
----------
Total liabilities and
stockholders' equity $2,777,004
==========
Net interest income
(tax equivalent) $ 92,900
==========
Average interest rate spread 3.30%
Interest expense as
percentage of
average earning assets 2.43%
Net interest margin 3.73%
Twelve months ended December 31,
(unaudited)
------------------------------------
2007
------------------------------------
Average Interest Average
Dollars in thousands Balance Inc/Exp Rates
-------------------- ---------- ---------- ----------
Assets
Loans receivable, net $1,210,638 $ 88,059 7.27%
Investment securities
Taxable 163,847 7,435 4.48%
Tax exempt 94,034 5,732 6.01%
---------- ---------- ----------
Total investments 257,881 13,167 5.04%
Interest bearing deposits 481 18 3.69%
Federal funds sold 1,445 78 5.32%
---------- ---------- ----------
259,807 13,263 5.04%
---------- ---------- ----------
Total earning assets 1,470,445 $ 101,322 6.89%
==========
Total nonearning assets 112,737
----------
Total assets $1,583,182
==========
Liabilities and Stockholders'
Equity
Interest-bearing deposits
Interest checking $ 170,475 $ 1,312 0.77%
Money market 147,295 3,649 2.48%
Savings 91,560 565 0.62%
Time deposits:
Less than $100,000 394,436 16,599 4.21%
$100,000 and more 201,432 9,426 4.68%
---------- ---------- ----------
Total interest-bearing
deposits 1,005,198 31,551 3.14%
Federal funds purchased and
securities sold under
agreements to repurchase 11,852 630 5.24%
Federal Home Loan Bank
advances 87,860 4,345 4.88%
Subordinated debt 20,619 1,684 8.06%
Commercial paper 71,545 3,141 4.33%
Other borrowings 772 39 4.98%
---------- ---------- ----------
192,648 9,839 5.04%
---------- ---------- ----------
Total interest-bearing
liabilities 1,197,846 41,390 3.45%
==========
Total noninterest-bearing
liabilities 229,668
----------
Total liabilities 1,427,514
Stockholders' equity 155,668
----------
Total liabilities and
stockholders' equity $1,583,182
==========
Net interest income
(tax equivalent) $ 59,932
==========
Average interest rate spread 3.44%
Interest expense as
percentage of
average earning assets 2.81%
Net interest margin 4.08%