CHARLOTTESVILLE, Va., July 27, 2009 (GLOBE NEWSWIRE) -- StellarOne Corporation (Nasdaq:STEL) (StellarOne) today reported a second quarter 2009 loss of $326 thousand and a net loss available to common shareholders of $785 thousand, or $0.03 per diluted common share. Those results compare to net income of $6.1 million, or diluted earnings per share of $0.27 during the same period in the prior year, and a net loss to common shareholders of $298 thousand or $0.01 per diluted common share recognized for the first quarter of 2009.
The results for the second quarter of 2009 were impacted by a provision for loan losses totaling $6.5 million that approximated net charge-offs of $6.9 million for the period, and compares to a provision for loan losses of $7.75 million during the first quarter of 2009 and $2.8 million for the same quarter in the prior year. Additionally, second quarter 2009 results were reduced by a special assessment from the FDIC totaling $1.3 million.
O. R. Barham, Jr., President and CEO, commented, "While earnings continue to be a challenge in this difficult economy, we are encouraged with the quarter on a number of fronts. While non-performing assets rose, the 11% increase is considerably less than that experienced in the previous three quarters, and we experienced little to no increase in problem assets associated with our residential real estate development loan exposure at Smith Mountain Lake. Past-due levels, including non-performing loans, were down 15% overall and down over 49% in the 30-89 day range from our previous quarter. Our mortgage banking division had a record quarter with revenues of $2.1 million and a solid earnings contribution. Our consolidated pre-tax, pre-provision quarterly earnings of $5.7 million were impacted by the special $1.3 million FDIC assessment accrued during the period, but are indicative of continuing core earnings stability. We continue to be frugal on our overhead costs and have several initiatives underway to improve efficiency. Average core deposit growth was strong for the quarter, with growth of $78.9 million or 13.6% annualized."
Usefulness of Prior Year Second Quarter Comparisons is Limited
StellarOne's 2008 second quarter operating results include nonrecurring merger expenses of $929 thousand and an increase in revenues from the amortization of purchase accounting adjustments of $2.4 million associated with the consummation of the merger between Virginia Financial Group, Inc. (VFG) and FNB Corporation (FNB). VFG and FNB were combined in a merger of equals transaction to create StellarOne Corporation. Therefore, linked quarter comparisons are emphasized as they are deemed more meaningful.
Capital Levels Remain Strong
StellarOne's capital level remains strong during the economic downturn. The tangible common equity ratio was 9.27% at June 30, 2009 compared to 9.53% at March 31, 2009. Tier 1 risk-based and total risk-based capital ratios were 13.47% and 14.72%, respectively, at June 30, 2009 compared to 13.65% and 14.95% at March 31, 2009. Excluding the $30 million in preferred stock issued in connection with participation in the TARP program, StellarOne's Tier 1 risk-based common ratio was 12.28% compared to 12.44% at March 31, 2009. Shareholder's equity, excluding the preferred stock, represented 11.77% of total assets at June 30, while book value per common share at June 30, 2009 was $15.88 per share. All capital ratios are significantly higher than an average of its peers and remain well above regulatory standards for well-capitalized banks.
Nonperforming Asset Levels and Credit Losses Increase
StellarOne's ratio of non-performing assets as a percentage of total assets increased to 2.60% as of June 30, 2009, compared to 2.38% as of March 31, 2009 and 0.86% as of June 30, 2008. Non-performing assets totaled $79.6 million at June 30, 2009 and consisted of non-accrual loans of $73.0 million, foreclosed property of $4.1 million and loans past due greater than ninety days and accruing of $1.3 million. Annualized net charge-offs as a percentage of average loans receivable amounted to 1.20% for the second quarter of 2009, compared to 0.51% for the first quarter of 2009 and 0.22% for the same quarter in the prior year. Net charge-offs for the second quarter totaled $6.9 million and were up $4.0 million compared to the $2.9 million in net charge-offs recognized during the first quarter of 2009 and up $5.6 million compared to the $1.3 million in net charge-offs posted during the second quarter of 2008.
The primary concentration of credit issues within the portfolio continues to be the residential development and construction loan segment of our portfolio, with emphasis on a concentration at Smith Mountain Lake (SML). Of the total nonaccrual loans of $73.0 million at June 30, 2009, approximately $41.6 million are residential development and construction loans, of which approximately $25.3 million or 61% are SML related.
StellarOne recorded a provision for loan losses of $6.5 million for the second quarter of 2009, a decrease of $1.3 million compared to the first quarter of 2009. The second quarter provision compares to net charge-offs of $6.9 million for the quarter, resulting in the allowance as a percentage of total loans remaining flat at 1.56% for June 30, 2009 when compared to March 31. While there are encouraging signs in the economy and past-due levels improved for the quarter, StellarOne continues to anticipate elevated non-performing assets and net charge-off levels throughout the remainder of 2009, and will likely see some migration of nonaccrual loans to foreclosed assets.
Balance Sheet Grows and Deposit Growth Enhances Strong Liquidity
Average loans for the second quarter of 2009 were $2.29 billion, remaining flat with that of the first quarter. Average securities were $327.2 million for the second quarter of 2009, up $15.2 million or 4.9% from $312.0 million for the first quarter of 2009. Average deposits for the second quarter were $2.41 billion, up $78.9 million or 3.4% compared to $2.33 billion for the first quarter of 2009. Approximately $64.4 million or 81.6% of this deposit growth related to increases in interest bearing deposits with the remaining $14.5 million resulting from additions to non-interest bearing deposits. Total average earning assets were $2.73 billion for the second quarter of 2009, up $65.2 million or 2.4% when compared to $2.66 billion for the first quarter of 2009. At June 30, 2009, total assets were $3.06 billion, compared to $3.00 billion at March 31, 2009. Cash and cash equivalents were $184.4 million at June 30, 2009, an increase of $39.9 million or 27.6% compared to $144.5 million at March 31, 2009. Shareholder's equity at June 30, 2009 was $389.7 million, a decrease of $2.6 million or 0.7% compared to March 31, 2009.
Noninterest Income Increases Driven by Mortgage and Retail Banking
On an operating basis, which excludes gains and losses from sales of assets, total non-interest income amounted to $8.3 million for the second quarter of 2009, an increase of $1.3 million or 17.8% from $7.0 million for first quarter of 2009. Mortgage banking revenue totaled $2.1 million for the second quarter, an increase of $660 thousand or 46.4% compared to $1.4 million for the first quarter of 2009. The increased originations are primarily a reflection of the favorable interest rate environment and have resulted in an increase in the earnings contribution from the mortgage line of business during the second quarter. Retail banking fee income amounted to $4.1 million for the second quarter, an increase of $402 thousand or 10.8% compared to $3.7 million for the first quarter of 2009, largely a result of more NSF charge activity and a higher realization rate associated with these fees. Wealth management revenues from trust and brokerage fees for the second quarter of 2009 were $989 thousand or essentially flat compared to $1.0 million in the first quarter of 2009. Revenues from this line of business remain suppressed due to lower market valuations for assets under management. Despite revenue contraction, wealth management contributed earnings to the company during both the first and second quarters of 2009. Revenues from other miscellaneous income sources for the second quarter of 2009 were $780 thousand, up $189 thousand or 32.0% compared to $591 thousand for the first quarter of 2009, related principally to seasonal insurance related revenues.
Core Margin Compression Continues
Net interest income, on a tax-equivalent basis and excluding the effects of purchase accounting amortization, amounted to $22.0 million for both the first and second quarters of 2009. The core net interest margin, adjusted to exclude the effect of purchasing accounting amortization, was 3.24% for the second quarter of 2009, compared to 3.36% for the first quarter 2009. Including the effects of purchase accounting adjustments, the net interest margin was 3.34% for the second quarter 2009, compared to 3.52% for the first quarter 2009. The compression noted continues to be yield driven, with the average yield on earning assets decreasing 30 basis points to 5.29% as compared to 5.59% for the first quarter of 2009. Contributing factors include a relatively high level of fixed rate re-pricing in the loan portfolio, the impact of an increasing amount of loans in nonaccrual status and a higher level of short term liquidity in the balance sheet. The cost of interest bearing liabilities contracted 14 basis points from 2.45% during the first quarter of 2009 to 2.31% during the second quarter of 2009, but remained much less sensitive to repricing when compared to interest earning assets.
Noninterest Expense Increases Due to FDIC Insurance Premiums and Mortgage Volume
Non-interest expense for the second quarter of 2009 amounted to $24.1 million, or up $1.9 million or 8.6% when compared to the $22.2 million for the first quarter of 2009 and down $553 thousand or 2.2% when compared to the same quarter in the prior year. A special assessment from the FDIC totaling $1.3 million, which is payable in September 2009, was accrued during the current quarter. Additionally, due to increased originations generated by a favorable interest rate environment experienced during the second quarter, mortgage commissions increased $391 thousand and loan operations expense increased $275 thousand when compared to the first quarter. Exclusive of these items, noninterest expense was relatively flat compared to the first quarter of 2009. StellarOne's efficiency ratio was 77.58% for the second quarter of 2009, compared to 73.70% for the first quarter of 2009, reflecting the increased expenses as noted for the period.
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 subsidiary, StellarOne Bank, StellarOne operates 59 full-service financial centers, one loan production office, and 66 ATMs serving the New River Valley, Roanoke Valley, Shenandoah Valley, and Central and North Central Virginia.
Earnings Webcast
To hear a live webcast of StellarOne's second quarter 2009 earnings conference call at 10.00 a.m. (EDT) today, please visit our website at www.stellarone.com and click on the Investor Relations section for detailed instructions on how to participate. Replays of the conference call will be available from 1:00 p.m. (EDT) on Monday, July 27, 2009 through 12:00 a.m. (EDT) on Sunday, August 2, 2009, by dialing toll free (888) 203-1112 and using passcode #4895485.
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. Pre-tax, pre-provision earnings, which adds back provision and tax expense to net income, is used to demonstrate a more representative comparison of operational performance without the volatility of credit quality that is typically present in times of economic stress. 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, (vii) changes may occur in the securities markets and (viii) the impact of governmental restrictions on entities participating in the US Treasury Department Capital Purchase Program. 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
STATEMENT Three Months Ended June Six Months Ended June
-------------------- ----------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Interest income -
taxable equivalent $ 35,972 $ 44,709 $ 72,666 $ 75,469
Interest expense 13,259 14,719 26,838 27,833
---------- ---------- ---------- ----------
Net interest income -
taxable equivalent 22,713 29,990 45,828 47,636
Less: taxable
equivalent adjustment 630 657 1,195 1,621
---------- ---------- ---------- ----------
Net interest income 22,083 29,333 44,633 46,847
Provision for loan and
lease losses 6,500 2,835 14,250 3,787
---------- ---------- ---------- ----------
Net interest income
after provision for
loan and lease
losses 15,583 26,498 30,383 43,060
Noninterest income 7,663 7,647 14,640 12,812
Noninterest expense 24,057 24,609 46,280 43,647
(Benefit) provision
for income taxes (485) 3,396 (1,077) 3,998
---------- ---------- ---------- ----------
Net income (326) 6,140 (180) 8,227
Dividends and
accretion on
preferred stock (374) -- (744) --
Accretion of preferred
stock discount (85) -- (159) --
---------- ---------- ---------- ----------
Net (loss) income
available to common
shareholders $ (785) $ 6,140 $ (1,083) $ 8,227
========== ========== ========== ==========
Earnings (Loss) per
share available to
common shareholders
Basic $ (0.03) $ 0.27 $ (0.05) $ 0.44
Diluted $ (0.03) $ 0.27 $ (0.05) $ 0.44
SUMMARY AVERAGE
BALANCE SHEET Three Months Ended June Six Months Ended June
-------------------- ----------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Total loans $2,291,735 $2,288,804 $2,288,118 $1,958,566
Total securities 327,224 403,175 319,287 345,061
Total earning assets 2,729,485 2,759,120 2,696,336 2,350,751
Total assets 3,013,084 3,049,826 2,982,830 2,579,607
Total deposits 2,407,444 2,373,305 2,368,201 1,972,859
Shareholders' Equity 390,930 367,327 392,461 293,823
PERFORMANCE RATIOS Three Months Ended June Six Months Ended June
-------------------- ---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Return on average
assets -0.04% 0.81% -0.01% 0.64%
Return on average
equity -0.34% 6.72% -0.09% 5.63%
Return on average
realized equity(A) -0.34% 6.72% -0.09% 5.65%
Net interest margin
(taxable equivalent) 3.34% 4.37% 3.43% 4.08%
Net interest margin
(excluding
amortization of
purchase accounting
adjustments) 3.24% 3.69% 3.30% 3.94%
Efficiency (taxable
equivalent)(B) 77.58% 65.26% 75.67% 71.51%
CREDIT QUALITY Three Months Ended June Six Months Ended June
-------------------- ----------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Allowance for loan
losses:
Beginning of period $ 35,319 $ 27,037 $ 30,464 $ 15,082
Provision for loan
losses 6,500 2,835 14,250 3,787
Charge-offs (7,783) (1,908) (11,225) (2,526)
Recoveries 887 651 1,434 733
---------- ---------- ---------- ----------
Net charge-offs (6,896) (1,257) (9,791) (1,793)
Allowance acquired
via acquisition -- -- -- 11,539
---------- ---------- ---------- ----------
End of period $ 34,923 $ 28,615 $ 34,923 $ 28,615
========== ========== ========== ==========
June 30 Six Months Ended June
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Total non-performing
assets $ 79,574 $ 25,931
Nonperforming assets
as a % of total
assets: 2.60% 0.86%
Nonperforming assets
as a % of loans plus
foreclosed assets 3.55% 1.13%
Allowance for loan
losses as a % of
total loans 1.56% 1.25%
Net charge-offs as a %
of average loans
outstanding 1.20% 0.22% 1.71% 0.18%
CAPITAL MANAGEMENT June 30
-------------------- ----------------------
2009 2008
---------- ----------
Tier 1 risk-based
capital ratio 13.47% 11.73%
Tangible equity ratio 10.27% 9.57%
Tangible common
equity ratio 9.27% 9.57%
Period end shares
issued and
outstanding 22,652,792 22,600,357
Book value per common
share 15.88 16.22
Tangible book value
per common share 12.16 12.48
Three Months Ended June Six Months Ended June
----------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Shares issued 22,156 22,670 47,729 11,804,414
Average common shares
issued and
outstanding 22,641,114 22,585,161 22,630,323 18,831,352
Average diluted
common shares issued
and outstanding 22,691,158 22,651,991 22,683,721 18,899,355
Cash dividends paid
per common share $ 0.04 $ 0.16 $ 0.20 $ 0.32
SUMMARY ENDING
BALANCE SHEET June 30
-------------------- ----------------------
2009 2008
---------- ----------
Total loans $2,240,112 $2,290,233
Total securities 352,166 349,645
Total earning assets 2,776,553 2,780,554
Total assets 3,056,915 3,030,695
Total deposits 2,449,338 2,414,748
Shareholders' Equity 389,706 366,544
Book value per share $ 17.20 $ 16.22
OTHER DATA
End of period full
time employees 831 901
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 6/30/2009 6/30/2008
--------- ---------
Assets
Cash and cash equivalents $ 184,390 $ 136,360
Securities available for sale 351,716 348,716
Securities held to maturity 450 929
Total securities 352,166 349,645
Mortgage loans held for sale 51,229 13,850
Real estate - construction 321,451 385,290
Real estate - 1-4 family residential 828,691 738,049
Real estate - commercial and multifamily 804,188 849,978
Commercial, financial and agricultural 220,557 231,377
Consumer loans 48,153 71,823
All other loans 17,072 13,716
Total loans 2,240,112 2,290,233
Deferred loan costs 984 841
Allowance for loan losses (34,923) (28,615)
Net loans 2,206,173 2,262,459
Premises and equipment, net 85,837 88,421
Core deposit intangibles, net 9,393 11,142
Goodwill 74,880 73,386
Bank owned life insurance 29,538 28,202
Foreclosed assets 4,121 2,260
Other assets 59,188 64,970
Total assets 3,056,915 3,030,695
Liabilities
Deposits:
Noninterest bearing deposits 318,879 346,861
Money market & interest checking 849,277 747,711
Savings 191,686 208,039
CD's and other time deposits 1,089,496 1,112,137
Total deposits 2,449,338 2,414,748
Federal funds purchased and securities sold
under agreements to repurchase 503 1,746
Federal Home Loan Bank advances 170,000 195,733
Subordinated debt 32,991 32,991
Commercial paper -- --
Other borrowings -- 59
Other liabilities 14,377 18,874
Total liabilities 2,667,209 2,664,151
Stockholders' equity
Preferred stock 28,224 --
Common stock 22,653 22,600
Additional paid-in capital 229,918 225,258
Retained earnings 108,045 119,865
Accumulated other comprehensive income
(loss), net 866 (1,179)
Total stockholders' equity 389,706 366,544
Total liabilities and stockholders'
equity $3,056,915 $3,030,695
QUARTERLY PERFORMANCE SUMMARY
StellarOne Corporation (NASDAQ: STEL)
(Dollars in thousands)
For the Three Months Percent
Ended Increase
6/30/2009 6/30/2008 (Decrease)
--------- --------- ----------
Interest Income
Loans, including fees $ 31,694 $ 39,208 -19.16%
Federal funds sold and deposits in
other banks 52 363 -85.67%
Investment securities:
Taxable 2,426 3,147 -22.91%
Tax-exempt 972 995 -2.31%
Dividends 198 339 -41.59%
Total interest income 35,342 44,052 -19.77%
Interest Expense
Deposits 11,360 12,458 -8.81%
Federal funds repurchased and
securities sold under agreements
to repurchase 3 5 -40.00%
Federal Home Loan Bank advances
and other borrowings 1,553 1,634 -4.96%
Subordinated debt 343 466 -26.39%
Commercial paper -- 156 -100.00%
Total interest expense 13,259 14,719 -9.92%
Net interest income 22,083 29,333 -24.72%
Provision for loan losses 6,500 2,835 >100.00%
Net interest income after provision
for loan losses 15,583 26,498 -41.19%
Noninterest Income
Retail banking fees 4,113 3,896 5.57%
Commissions and fees from fiduciary
activities 744 1,071 -30.53%
Brokerage fee income 245 318 -22.96%
Mortgage banking-related fees 2,083 1,357 53.50%
Losses on sale of premises and
equipment (289) (21) >100.00%
Gains on securities available for
sale 11 206 -94.66%
Losses on sale of foreclosed assets (355) (260) 36.54%
Income from bank owned life
insurance 331 319 3.76%
Other operating income 780 761 2.50%
Total noninterest income 7,663 7,647 0.21%
Noninterest Expense
Compensation and employee benefits 10,836 11,763 -7.88%
Net occupancy 2,163 1,834 17.94%
Supplies and equipment 2,265 2,170 4.38%
Amortization-intangible assets 434 531 >100.00%
Marketing 388 831 -53.31%
State franchise taxes 574 585 -1.88%
FDIC insurance 2,088 68 >100.00%
Data processing 645 992 -34.98%
Professional fees 489 640 -23.59%
Telecommunications 477 457 4.38%
Other operating expenses 3,698 4,738 -21.95%
Total noninterest expense 24,057 24,609 -2.24%
(Loss) income before income taxes (811) 9,536 >100.00%
Income tax (benefit) expense (485) 3,396 >100.00%
Net (loss) income $ (326) $ 6,140 >100.00%
QUARTERLY PERFORMANCE SUMMARY
StellarOne Corporation (NASDAQ: STEL)
(Dollars in thousands)
For the Six Months Percent
Ended Increase
6/30/2009 6/30/2008 (Decrease)
--------- --------- ----------
Interest Income
Loans, including fees $ 64,186 $ 66,469 -3.43%
Federal funds sold and deposits in
other banks 84 563 -85.08%
Investment securities:
Taxable 5,009 5,210 -3.86%
Tax-exempt 1,820 1,832 -0.66%
Dividends 373 606 -38.45%
Total interest income 71,472 74,680 -4.30%
Interest Expense
Deposits 23,011 22,663 1.54%
Federal funds purchased and
securities sold under agreements
to repurchase 7 60 -88.33%
Federal Home Loan Bank advances
and other borrowings 3,121 3,545 -11.96%
Subordinated debt 700 930 -24.73%
Commercial paper -- 635 -100.00%
Total interest expense 26,839 27,833 -3.57%
Net interest income 44,633 46,847 -4.73%
Provision for loan losses 14,250 3,787 >100.00%
Net interest income after provision
for loan losses 30,383 43,060 -29.44%
Noninterest Income
Retail banking fees 7,824 6,463 21.06%
Commissions and fees from fiduciary
activities 1,502 1,969 -23.72%
Brokerage fee income 498 638 -21.94%
Mortgage banking-related fees 3,507 2,228 57.41%
Losses on sale of premises and
equipment (90) (64) 40.63%
Gains on securities available for
sale 13 238 -94.54%
Losses on sale of foreclosed assets (620) (759) -18.31%
Income from bank owned life
insurance 635 511 24.27%
Other operating income 1,371 1,588 -13.66%
Total noninterest income 14,640 12,812 14.27%
Noninterest Expense
Compensation and employee benefits 21,362 22,931 -6.84%
Net occupancy 4,254 2,995 42.04%
Supplies and equipment 4,406 3,710 18.76%
Amortization-intangible assets 872 691 26.19%
Marketing 628 1,248 -49.68%
State franchise taxes 1,170 980 19.39%
FDIC insurance 3,193 115 >100.00%
Data processing 1,502 2,076 -27.65%
Professional fees 993 1,214 -18.20%
Telecommunications 944 746 26.54%
Other operating expenses 6,956 6,941 0.22%
Total noninterest expense 46,280 43,647 6.03%
Income before income taxes (1,257) 12,225 >100.00%
Income tax (benefit) expense (1,077) 3,998 >100.00%
Net (loss) income $ (180) $ 8,227 >100.00%
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
THREE MONTHS ENDED JUNE 30, 2009 AND 2008
(Dollars in thousands)
For the Three Months Ended June 30,
(unaudited)
--------------------------------------------------------
2009 2008
---------------------------- ---------------------------
Dollars in Average Interest Average Average Interest Average
thousands Balance Inc/Exp Rates Balance Inc/Exp Rates
------------ ---------- -------- ------- ---------- ----------------
Assets
Loans
receivable,
net $2,291,735 $ 31,801 5.57% $2,288,804 $ 39,329 6.91%
Investment
securities
Taxable 230,102 2,624 4.51% 307,571 3,500 4.50%
Tax exempt 97,122 1,496 6.09% 95,604 1,531 6.34%
---------- -------- ------ ---------- -------- ------
Total
investments 327,224 4,120 4.98% 403,175 5,031 4.94%
Interest
bearing
deposits 51,966 31 0.24% 3,943 9 0.90%
Federal funds
sold 58,560 20 0.14% 63,198 340 2.13%
---------- -------- ------ ---------- -------- ------
437,750 4,171 3.77% 470,316 5,380 4.53%
Total earning ---------- -------- ---------- --------
assets 2,729,485 $ 35,972 5.29% 2,759,120 $ 44,709 6.51%
======== ========
Total
nonearning
assets 283,599 290,706
---------- ----------
Total assets $3,013,084 $3,049,826
========== ==========
Liabilities and
Stockholders'
Equity
Interest-
bearing
deposits
Interest
checking $ 524,408 $ 1,255 0.96% $ 497,074 $ 505 0.41%
Money market 275,534 1,047 1.52% 191,406 817 1.71%
Savings 191,788 420 0.88% 211,158 1,755 3.33%
Time
deposits:
Less than
$100,000 794,180 5,926 2.99% 769,415 5,664 2.95%
$100,000 and
more 305,297 2,712 3.56% 364,876 3,717 4.09%
---------- -------- ------ ---------- -------- ------
Total
interest-
bearing
deposits 2,091,207 11,360 2.18% 2,033,929 12,458 2.46%
Federal funds
purchased and
securities
sold under
agreements to
repurchase 464 3 2.56% 7,919 5 0.25%
Federal Home
Loan Bank
advances and
other
borrowings 170,067 1,553 3.61% 236,759 1,634 2.73%
Subordinated
debt 32,991 343 4.11% 32,991 466 5.59%
Commercial
paper -- -- N/A 23,821 156 2.59%
---------- -------- ------ ---------- -------- ------
203,522 1,899 3.69% 301,490 2,261 2.97%
Total
interest-
bearing ---------- -------- ------ ---------- -------- ------
liabilities 2,294,729 13,259 2.31% 2,335,419 14,719 2.53%
======== ========
Total
noninterest-
bearing
liabilities 327,425 347,080
Total ---------- ----------
liabilities 2,622,154 2,682,499
Stockholders'
equity 390,930 367,327
Total
liabilities
and stock-
holders' ---------- ----------
equity $3,013,084 $3,049,826
========== ==========
Net interest
income (tax
equivalent) $ 22,713 $ 29,990
======== ========
Average
interest
rate spread 2.97% 3.98%
Interest
expense as
percentage
of average
earning
assets 1.95% 2.14%
Net interest
margin 3.34% 4.37%
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
SIX MONTHS ENDED JUNE 30, 2009 AND 2008
(Dollars in thousands)
For the Six Months Ended June 30,
(unaudited)
--------------------------------------------------------
2009 2008
---------------------------- ---------------------------
Dollars in Average Interest Average Average Interest Average
thousands Balance Inc/Exp Rates Balance Inc/Exp Rates
------------ ---------- -------- ------- ---------- -------- -------
Assets
Loans
receivable,
net $2,288,118 $ 64,400 5.69% $1,958,566 $ 66,628 6.84%
Investment
securities
Taxable 228,873 5,382 4.68% 255,090 6,468 5.02%
Tax exempt 90,414 2,801 6.16% 89,971 1,838 4.04%
---------- -------- ------ ---------- -------- ------
Total
investments 319,287 8,183 5.10% 345,061 8,306 4.76%
Interest
bearing
deposits 50,885 40 0.16% 2,214 12 1.07%
Federal funds
sold 38,046 43 0.22% 44,910 523 2.29%
---------- -------- ------ ---------- -------- ------
408,218 8,266 4.03% 392,185 8,841 4.46%
Total earning ---------- -------- ---------- --------
assets 2,696,336 $ 72,666 5.44% 2,350,751 $ 75,469 6.45%
======== ========
Total
nonearning
assets 286,494 228,856
---------- ----------
Total assets $2,982,830 $2,579,607
========== ==========
Liabilities
and
Stockholders'
Equity
Interest-
bearing
deposits
Interest
checking $ 520,463 $ 2,652 1.03% $ 401,052 $ 898 0.45%
Money market 255,453 1,877 1.48% 161,291 1,482 1.84%
Savings 190,103 830 0.88% 169,115 2,796 3.32%
Time
deposits:
Less than
$100,000 778,506 11,986 3.10% 641,569 10,962 3.43%
$100,000 and
more 314,643 5,666 3.63% 310,141 6,525 4.22%
---------- -------- ------ ---------- -------- ------
Total
interest-
bearing
deposits 2,059,168 23,011 2.25% 1,683,168 22,663 2.70%
Federal funds
purchased and
securities
sold under
agreements to
repurchase 405 7 3.44% 6,681 60 1.78%
Federal Home
Loan Bank
advances and
other
borrowings 177,155 3,120 3.50% 210,851 3,545 3.34%
Subordinated
debt 32,991 700 4.22% 28,708 930 6.41%
Commercial
paper -- -- N/A 49,010 635 2.56%
---------- -------- ------ ---------- -------- ------
210,551 3,827 3.62% 295,928 5,170 3.46%
Total
interest-
bearing ---------- -------- ------ ---------- -------- ------
liabilities 2,269,719 26,838 2.38% 1,979,096 27,833 2.81%
======== ========
Total
noninterest-
bearing
liabilities 320,650 306,688
Total ---------- ----------
liabilities 2,590,369 2,285,784
Stockholders'
equity 392,461 293,823
Total
liabilities
and stock-
holders' ---------- ----------
equity $2,982,830 $2,579,607
========== ==========
Net interest
income (tax
equivalent) $ 45,828 $ 47,636
======== ========
Average
interest
rate spread 3.06% 3.64%
Interest
expense as
percentage
of average
earning
assets 2.01% 2.37%
Net interest
margin 3.43% 4.08%
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
NORMALIZED BY EXCLUDING PURCHASE ACCOUNTING ADJUSTMENTS
THREE MONTHS ENDED JUNE 30, 2009 AND 2008
(Dollars in thousands)
For the Three Months Ended June 30,
(unaudited)
--------------------------------------------------------
2009 2008
---------------------------- ---------------------------
Dollars in Average Interest Average Average Interest Average
thousands Balance Inc/Exp Rates Balance Inc/Exp Rates
------------ ---------- -------- ------- ---------- ----------------
Assets
Loans
receivable,
net $2,293,139 $ 31,062 5.44% $2,290,648 $ 37,225 6.53%
Investment
securities
Taxable 230,102 2,624 4.51% 307,571 3,500 4.50%
Tax exempt 97,122 1,496 6.09% 95,604 1,531 6.34%
---------- -------- ------ ---------- -------- ------
Total
investments 327,224 4,120 4.98% 403,175 5,031 4.94%
Interest
bearing
deposits 51,966 31 0.24% 3,943 9 0.90%
Federal funds
sold 58,560 20 0.14% 63,198 340 2.13%
---------- -------- ------ ---------- -------- ------
437,750 4,171 3.77% 470,316 5,380 4.53%
---------- -------- ---------- --------
Total earning
assets 2,730,889 $ 35,233 5.18% 2,760,964 $ 42,605 6.20%
======== ========
Total
nonearning
assets 285,590 285,590
---------- ----------
Total assets $3,016,479 $3,046,554
========== ==========
Liabilities
and
Stockholders'
Equity
Interest-
bearing
deposits
Interest
checking $ 524,408 $ 1,255 0.96% $ 497,074 $ 505 0.41%
Money market 275,534 1,047 1.52% 191,406 817 1.71%
Savings 191,788 420 0.88% 211,158 1,755 3.33%
Time
deposits:
Less than
$100,000 794,180 5,926 2.99% 766,517 7,490 3.92%
$100,000 and
more 305,297 2,712 3.56% 364,876 3,717 4.09%
---------- -------- ------ ---------- -------- ------
Total
interest-
bearing
deposits 2,091,207 11,360 2.18% 2,031,031 14,284 2.82%
Federal funds
purchased and
securities
sold under
agreements to
repurchase 464 3 2.56% 7,919 5 0.25%
Federal Home
Loan Bank
advances and
other
borrowings 170,067 1,553 3.61% 237,677 2,392 3.98%
Subordinated
debt 32,991 343 4.11% 32,991 466 5.59%
Commercial
paper -- -- N/A 23,821 156 2.59%
---------- -------- ------ ---------- -------- ------
203,522 1,899 3.69% 302,408 3,019 3.95%
Total
interest-
bearing ---------- -------- ------ ---------- -------- ------
liabilities 2,294,729 13,259 2.31% 2,333,439 17,303 2.97%
======== ========
Total
noninterest-
bearing
liabilities 327,425 347,080
Total ---------- ----------
liabilities 2,622,154 2,680,519
Stockholders'
equity 390,930 367,327
Total
liabilities
and stock-
holders' ---------- ----------
equity $3,013,084 $3,047,846
========== ==========
Net interest
income (tax
equivalent) $ 21,974 $ 25,302
======== ========
Average
interest
rate spread 2.87% 3.23%
Interest
expense as
percentage
of average
earning
assets 1.95% 2.51%
Net interest
margin 3.24% 3.69%
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
NORMALIZED BY EXCLUDING PURCHASE ACCOUNTING ADJUSTMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008
(Dollars in thousands)
For the Six Months Ended June 30,
(unaudited)
--------------------------------------------------------
2009 2008
---------------------------- ---------------------------
Dollars in Average Interest Average Average Interest Average
thousands Balance Inc/Exp Rates Balance Inc/Exp Rates
------------ ---------- -------- ------- ---------- -------- -------
Assets
Loans
receivable,
net $2,289,946 $ 62,721 5.54% $1,960,394 $ 64,949 6.70%
Investment
securities
Taxable 228,873 5,382 4.68% 255,090 6,468 5.04%
Tax exempt 90,414 2,801 6.16% 89,971 1,838 4.06%
---------- -------- ------ ---------- -------- ------
Total
investments 319,287 8,183 5.10% 345,061 8,306 4.79%
Interest
bearing
deposits 50,885 40 0.16% 2,214 12 1.08%
Federal funds
sold 38,046 43 0.22% 44,910 523 2.32%
---------- -------- ------ ---------- -------- ------
408,218 8,266 4.03% 392,185 8,841 4.49%
---------- -------- ---------- --------
Total earning
assets 2,698,164 $ 70,987 5.32% 2,352,579 $ 73,790 6.34%
======== ========
Total
nonearning
assets 285,590 285,590
---------- ----------
Total assets $2,983,754 $2,638,169
========== ==========
Liabilities
and
Stockholders'
Equity
Interest-
bearing
deposits
Interest
checking $ 520,463 $ 2,652 1.03% $ 401,052 $ 898 0.45%
Money market 255,453 1,877 1.48% 161,291 1,482 1.85%
Savings 190,103 830 0.88% 169,115 2,796 3.33%
Time
deposits:
Less than
$100,000 778,485 12,116 3.14% 641,548 11,092 3.49%
$100,000 and
more 314,643 5,666 3.63% 310,141 6,525 4.24%
---------- -------- ------ ---------- -------- ------
Total
interest-
bearing
deposits 2,059,147 23,141 2.27% 1,683,147 22,793 2.73%
Federal funds
purchased and
securities
sold under
agreements to
repurchase 405 7 3.44% 6,681 60 1.79%
Federal Home
Loan Bank
advances and
other
borrowings 177,155 3,120 3.50% 210,851 3,545 3.34%
Subordinated
debt 32,991 700 4.22% 28,708 930 6.44%
Commercial
paper -- -- N/A 49,010 635 2.58%
---------- -------- ------ ---------- -------- ------
210,551 3,827 3.62% 295,250 5,170 3.48%
Total
interest-
bearing ---------- -------- ------ ---------- -------- ------
liabilities 2,269,698 26,968 2.40% 1,978,397 27,963 2.84%
======== ========
Total
noninterest-
bearing
liabilities 320,650 306,688
Total ---------- ----------
liabilities 2,590,348 2,285,085
Stockholders'
equity 392,461 293,823
Total
liabilities
and
stock-
holders' ---------- ----------
equity $2,982,809 $2,578,908
========== ==========
Net interest
income (tax
equivalent) $ 44,019 $ 45,827
======== ========
Average
interest
rate spread 2.92% 3.49%
Interest
expense as
percentage
of average
earning
assets 2.02% 2.40%
Net interest
margin 3.30% 3.94%