CHARLOTTESVILLE, Va., Oct. 21, 2010 (GLOBE NEWSWIRE) -- StellarOne Corporation (Nasdaq:STEL) (StellarOne) today reported third quarter 2010 earnings of $3.5 million and net income available to common shareholders, which deducts from net income the dividends and discount accretion on preferred stock, of $3.1 million, or $0.13 net income per diluted common share. Those results compare to a net loss to common shareholders of $9.4 million, or $0.41 loss per diluted common share during the same quarter in the prior year, and net income to common shareholders of $1.1 million or $0.05 per diluted common share recognized for the second quarter of 2010. Strong noninterest income contributions from mortgage banking, lower loan loss provisioning and reduced losses on foreclosed assets offset impacts from higher mortgage indemnification losses and reduced retail banking fees, resulting in the highest earnings level in eight quarters.
Third quarter 2010 notable elements include:
-
Nonperforming asset levels decreased $8.4 million on a sequential basis. The ratio of non-performing assets as a percentage of total assets decreased sequentially to 2.13% as of September 30, 2010, compared to 2.36% as of June 30, 2010.
-
The third quarter provision for loan losses totaled $3.5 million which compares to a provision for loan losses of $7.4 million for the second quarter of 2010 and $20.1 million for the third quarter of 2009. The third quarter provision for loan losses of $3.5 million compares to net charge-offs of $5.1 million.
-
Annualized net charge-offs as a percentage of average loans outstanding were 0.94% for the third quarter of 2010, compared to 2.47% for the corresponding quarter in the prior year and 1.19% for the second quarter of 2010.
-
The allowance for loan losses as a percentage of non-performing loans increased. The allowance represents 78.2% of non-performing loans at September 30, 2010, or up 13.4% when compared to 64.8% at June 30, 2010.
-
Net interest margin expanded another 4 basis points on a sequential quarter basis, which was the net result of a 16 basis point reduction in the associated cost of funds and a 9 basis point contraction on interest earning assets.
-
Noninterest income on an operating basis decreased 4.8% due to lower fee income from retail banking and wealth management, while increased mortgage banking fees were offset by higher losses from mortgage indemnifications.
- Pre-tax, pre-provision earnings amounted to $8.1 million for the third quarter, a decrease of $691 thousand or 7.9% compared to the second quarter of 2010, and an increase of $3.0 million or 58.8% compared to the same period in the prior year.
Operating Noninterest Income Decreases
On an operating basis, which excludes gains and losses from sales and impairments of securities and other assets, total non-interest income amounted to $8.0 million for the third quarter of 2010, or down $397 thousand or 4.8% on a sequential basis compared to the second quarter of 2010, and an increase of $217 thousand or 2.8% from $7.7 million for the same period in prior year. Total noninterest income contracted slightly on a sequential basis largely due to higher losses on mortgage indemnifications, lower retail banking revenues and decreased other operating revenues. This decrease was somewhat offset by the elevated revenue contribution from the mortgage banking segment, reduced losses associated with foreclosed assets and $336 thousand in nonrecurring gains recognized on the sale of available for sale securities.
Mortgage banking revenue totaled $2.6 million for the third quarter of 2010, or up $549 thousand or 26.8% compared to $2.1 million for the second quarter of 2010 and up $764 thousand or 41.5% when compared to the same quarter in 2009. The mortgage revenue increase for the third quarter was offset by $809 thousand in indemnification losses accrued in the third quarter of 2010. Losses continue to be related to 2006 and 2007 production from our wholesale division with minimal losses realized from subsequent production periods. These losses were up $340 thousand or 72.5% on a sequential basis and up $753 thousand or greater than 100% when compared to the same quarter in the prior year. In spite of the indemnification impact, the business segment remained modestly profitable for the quarter.
Retail banking fee income amounted to $4.1 million for the third quarter of 2010, a decrease of $170 thousand or 4.0% compared to $4.3 million for the second quarter of 2010. This sequential quarter decrease was attributable to a decrease of $169 thousand in consumer NSF and interchange fee income, which resulted from implementing the modifications to Regulation E that became effective during the current quarter. Based on the initial impact of Regulation E noted during the third quarter, retail banking fee income would contract by approximately $1.5 million to $1.8 million on an annual basis.
Wealth management revenues from trust and brokerage fees for the third quarter of 2010 were $1.1 million or down $135 thousand or 10.6% when compared to $1.3 million realized during the second quarter of 2010, and flat when compared to third quarter of 2009. Lower fee realizations attributed to the revenue decline. Fiduciary assets under management increased to $457.9 million, compared to $455.8 million at June 30, 2010.
Net Interest Margin Expands for Fourth Consecutive Quarter
Net interest income on a tax-equivalent basis amounted to $24.1 million for the third quarter of 2010, which compares to $23.8 million for the second quarter of 2010, and $22.7 million for the same period in prior year. The net interest margin was 3.63% for the third quarter, compared to 3.59% for the second quarter of 2010 and 3.30% for the third quarter of 2009. The average yield on earning assets for the current quarter decreased 9 basis points to 4.84% as compared to 4.93% for the second quarter of 2010, which was offset by improvement in the cost of interest bearing liabilities, which contracted 16 basis points from 1.59% during the second quarter of this year to 1.43% during the third quarter of 2010. The re-pricing sensitivity of interest bearing liabilities outpaced interest earning assets during the third quarter as approximately $196.5 million or 22.5% of the CD portfolio re-priced, while the cost of funds associated with interest checking and money market accounts was reduced by 22 basis points and 4 basis points, respectively. Average earning assets contracted sequentially, with average earnings assets of $2.64 billion at September 30, 2010 or down $21.4 million or 0.8% when compared to $2.67 billion at June 30, 2010. The net decrease in earning assets for the third quarter 2010 was driven by sequential loan contraction of $24.3 million or 1.1% and a decrease in federal funds sold of $22.9 million or 36.9%, which were offset by increased investment balances of $25.0 million or 6.7%. While new loan production is showing signs of improvement, it has not kept pace with loan contractions attributable to both consumers and businesses reducing the level of debt outstanding, and the Company's continuing deliberate effort to reduce its exposure to construction and real estate lending.
Non-performing Asset Levels Decrease Sequentially
StellarOne's non-performing assets totaled $62.1 million at September 30, 2010, down $8.4 million or 11.9% from $70.6 million at June 30, 2010 and up $15.3 million or 32.8% compared to $46.8 million at September 30, 2009. The ratio of non-performing assets as a percentage of total assets decreased sequentially to 2.13% as of September 30, 2010, compared to 2.36% as of June 30, 2010, and increased compared to 1.55% at September 30, 2009. Non-performing loans totaled $51.1 million at September 30, 2010, down $13.0 million or 20.3% when compared to $64.1 million at June 30, 2010 and up $8.5 million or 19.9% compared to $42.6 million at September 30, 2009. Foreclosed assets totaled $10.5 million, up $4.5 million or 77.0% compared to $6.0 million at June 30, 2010 and up $6.3 million or greater than 100% compared to September 30, 2009. Past due and matured loans between 30 and 89 days totaled $49.3 million at September 30, 2010, up $7.9 million or 19.1% compared to $41.4 million at June 30, 2010.
Annualized net charge-offs as a percentage of average loans receivable amounted to 0.94% for the third quarter of 2010, down compared to 2.22% for the full-year 2009 results and down sequentially from 1.19% for the second quarter of 2010. Net charge-offs for the third quarter of 2010 totaled $5.1 million or down $1.4 million or 21.9% compared to the $6.5 million realized during the second quarter of 2010 and down $8.8 million or 63.7% when compared to $13.9 million during the third quarter of 2009.
The mix of non-performing loans continues to be weighted to the residential development and construction loan segment of our portfolio. Of the total nonaccrual loans of $51.1 million at September 30, 2010, approximately $23.3 million are residential development and construction loans, of which approximately $13.3 million are located at Smith Mountain Lake, Virginia. Real estate exposure at Smith Mountain Lake was reduced $5.2 million or 15% during the third quarter, resulting in total real estate exposure of $29.5 million at September 30, 2010, as compared to $47.4 million at September 30, 2009.
StellarOne recorded a provision for loan losses of $3.5 million for the third quarter of 2010, a decrease of $16.6 million compared to same period in the prior year and down $3.9 million on a sequential quarter basis. The third quarter 2010 provision compares to net charge-offs of $5.1 million, resulting in an allowance as a percentage of total loans of 1.92% or down three basis points when compared to 1.95% as of June 30, 2010. The allowance represents 78.2% of non-performing loans at September 30, 2010, or up 13.4% when compared to 64.8% at June 30, 2010.
Efficiency Ratio Increases Sequentially
StellarOne's efficiency ratio was 71.81% for the third quarter of 2010, compared to 77.68% for the third quarter of 2009 and 69.05% for the second quarter of 2010. The sequential quarter increase in the efficiency ratio reflects an increase in noninterest expense while total revenues remained relatively flat. Non-interest expense for the third quarter amounted to $23.7 million, or up $875 thousand or 3.8% when compared to the $22.8 million for the second quarter of 2010 and up $918 thousand or 4.0% when compared to the third quarter in 2009. The sequential increase was driven by an increase in FDIC insurance expense of $295 thousand and increases in compensation and benefit expense and appraisal expenses both of which are associated with higher mortgage production levels. As mentioned previously, mortgage revenues were elevated during the quarter, but were offset by an increase in mortgage indemnification expense incurred.
Strong Capital Levels Enhanced By Earnings Retention
StellarOne's risk-based capital ratios remain well above regulatory standards for well-capitalized banks. The period-end tangible common equity ratio was 9.96% at September 30, 2010 compared to 9.57% at June 30, 2010. Tier 1 risk-based and total risk-based capital ratios were 14.49% and 15.74%, respectively, at September 30, 2010 compared to 14.01% and 15.27% at June 30, 2010. 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 13.19% compared to 12.67% at June 30, 2010. Shareholder's equity, excluding the preferred stock, represented 13.68% of total assets at September 30, 2010, while book value per common share was $17.56 per share.
Balance Sheet Remains Liquid and Contracts Slightly
Average loans for the third quarter of 2010 were $2.14 billion, or down approximately 1.4% when compared to $2.17 billion for the second quarter of 2010. Average securities were $397.9 million for the third quarter, up $25.0 million or 6.7% from $372.9 million for the second quarter of 2010. Average deposits for the third quarter of 2010 were $2.38 billion or down slightly from $2.39 billion on a sequential quarter basis. Average interest bearing deposits decreased sequentially by approximately $20.2 million, while non-interest bearing deposits increased approximately $4.0 million. At September 30, 2010, total assets were $2.92 billion, compared to $2.99 billion at June 30, 2010. Cash and cash equivalents were $108.9 million at September 30, 2010, a decrease of $17.4 million or 13.8% compared to $126.3 million at June 30, 2010.
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 56 full-service financial centers, one loan production office, and a suite of 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 third quarter 2010 earnings conference call at 11:00 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 2:00 p.m. (EDT) on Thursday, October 21, 2010 through midnight (EDT) on Wednesday, October 27, 2010, by dialing toll free (800) 642-1687 and using passcode #17939843.
Non-GAAP Financial Measures
This report refers to the efficiency ratio, which is computed by dividing non-interest expense less amortization of intangibles, foreclosed property expense and goodwill impairments as a percent of the sum of net interest income on a tax equivalent basis and non-interest income excluding only gains on securities. Comparison of our efficiency ratio or operating earnings with those of other companies may not be possible because other companies may calculate them differently. It also refers to operating earnings, which reflects net income adjusted for non-recurring expenses associated with mergers, asset gains and losses or expenses that are unusual in nature. Pre-tax, pre-provision earnings, which adds back provision and tax expense to net income, is used to demonstrate a more representative comparison of operational performance without the volatility of credit quality that is typically present in times of economic stress. The tangible common equity and Tier 1 common equity ratios are used by management to assess the quality of capital and management believes that investors may find them useful in their analysis of the company. These capital measures are not necessarily comparable to similar capital measures that may be presented by other companies. Such information is not in accordance with generally accepted accounting principles in the United States (GAAP) and should not be construed as such. These are non-GAAP financial measures that we believe provide investors with important information regarding our operational efficiency. Management believes such financial information is meaningful to the reader in understanding operating performance, but cautions that such information should not be viewed as a substitute for GAAP. StellarOne, in referring to its net income, is referring to income under GAAP.
Forward-Looking Statements
In addition to historical information, this press release contains forward-looking statements. The forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results, or those anticipated. When we use words such as "believes," "expects," "anticipates" or similar expressions, we are making forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date thereof. StellarOne wishes to caution the reader that factors, such as those listed below, in some cases have affected and could affect StellarOne's actual results, causing actual results to differ materially from those in any forward-looking statement. These factors include: (i) expected cost savings from StellarOne's acquisitions and dispositions, (ii) competitive pressure in the banking industry or in StellarOne's markets may increase significantly, (iii) changes in the interest rate environment may reduce margins, (iv) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, credit quality deterioration, (v) changes may occur in banking legislation and regulation, (vi) changes may occur in general business conditions, (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 September | Nine Months Ended September | ||
| 2010 | 2009 | 2010 | 2009 | |
| Interest income - taxable equivalent | $ 32,248 | $ 35,141 | $ 98,098 | $ 107,503 |
| Interest expense | 8,048 | 12,473 | 26,962 | 39,312 |
| Net interest income - taxable equivalent | 24,200 | 22,668 | 71,136 | 68,191 |
| Less: taxable equivalent adjustment | 666 | 699 | 1,886 | 1,894 |
| Net interest income | 23,534 | 21,969 | 69,250 | 66,297 |
| Provision for loan and lease losses | 3,500 | 20,050 | 17,550 | 34,300 |
| Net interest income after provision for loan and lease losses | 20,034 | 1,919 | 51,700 | 31,997 |
| Noninterest income | 8,247 | 5,891 | 25,442 | 20,688 |
| Noninterest expense | 23,665 | 22,748 | 69,003 | 68,882 |
| Income tax (benefit) expense | 1,088 | (6,043) | 1,203 | (7,121) |
| Net income (loss) | 3,528 | (8,895) | 6,936 | (9,076) |
| Dividends and accretion on preferred stock | (378) | (378) | (1,122) | (1,122) |
| Accretion of preferred stock discount | (92) | (86) | (271) | (245) |
| Net income (loss) available to common shareholders | $ 3,058 | $ (9,359) | $ 5,543 | $ (10,443) |
| Earnings (Loss) per share available to common shareholders | ||||
| Basic | $ 0.13 | $ (0.41) | $ 0.24 | $ (0.46) |
| Diluted | $ 0.13 | $ (0.41) | $ 0.24 | $ (0.46) |
| SUMMARY AVERAGE BALANCE SHEET | Three Months Ended September | Nine Months Ended September | ||
| 2010 | 2009 | 2010 | 2009 | |
| Total loans | $ 2,144,270 | $ 2,260,411 | $ 2,172,148 | $ 2,278,781 |
| Total securities | 397,896 | 344,249 | 378,910 | 327,459 |
| Total earning assets | 2,642,854 | 2,728,401 | 2,657,916 | 2,706,903 |
| Total assets | 2,977,605 | 3,051,335 | 2,987,101 | 3,031,623 |
| Total deposits | 2,376,285 | 2,428,693 | 2,390,404 | 2,388,587 |
| Shareholders' equity | 428,231 | 428,344 | 424,682 | 430,262 |
| PERFORMANCE RATIOS | Three Months Ended September | Nine Months Ended September | ||
| 2010 | 2009 | 2010 | 2009 | |
| Return on average assets | 0.47% | -1.17% | 0.31% | -0.40% |
| Return on average equity | 3.27% | -8.24% | 2.18% | -2.82% |
| Return on average realized equity (A) | 3.34% | -8.30% | 2.22% | -2.84% |
| Net interest margin (taxable equivalent) | 3.63% | 3.30% | 3.58% | 3.37% |
| Efficiency (taxable equivalent) (B) | 71.81% | 77.68% | 70.18% | 75.59% |
| CAPITAL MANAGEMENT | September 30, | |||
| 2010 | 2009 | |||
| Tier 1 risk-based capital ratio | 14.49% | 13.15% | ||
| Tangible equity ratio | 11.03% | 10.39% | ||
| Tangible common equity ratio | 9.96% | 9.35% | ||
| Period end shares issued and outstanding | 22,748,062 | 22,661,007 | ||
| Book value per common share | 17.56 | 17.37 | ||
| Tangible book value per common share | 12.25 | 11.96 | ||
| Three Months Ended September | Nine Months Ended September | |||
| 2010 | 2009 | 2010 | 2009 | |
| Shares issued | 6,028 | 8,215 | 86,937 | 55,944 |
| Average common shares issued and outstanding | 22,745,527 | 22,657,474 | 22,712,383 | 22,639,473 |
| Average diluted common shares issued and outstanding | 22,795,132 | 22,707,904 | 22,767,862 | 22,689,945 |
| Cash dividends paid per common share | $ 0.04 | $ 0.04 | $ 0.12 | $ 0.24 |
| SUMMARY ENDING BALANCE SHEET | September 30, | |||
| 2010 | 2009 | |||
| Total loans | $ 2,082,802 | $ 2,221,914 | ||
| Total securities | 403,415 | 345,779 | ||
| Total earning assets | 2,596,037 | 2,723,516 | ||
| Total assets | 2,919,570 | 3,021,036 | ||
| Total deposits | 2,348,904 | 2,404,421 | ||
| Shareholders' equity | 429,454 | 423,699 | ||
| OTHER DATA | ||||
| End of period full time equivalent employees | 830 | 825 | ||
| NOTES: | ||||
|
(A) Excludes the effect on average stockholders' equity of unrealized gains (losses) that result from changes in market values of securities and other comprehensive pension expense. |
||||
|
(B) Computed by dividing non-interest expense less amortization of intangibles, foreclosed asset expense and goodwill impairments by the sum of net interest income on a fully tax equivalent basis and non-interest income excluding only gains on securities. 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) | |||||
| CREDIT QUALITY | Three Months Ended September | Nine Months Ended September | |||
| 2010 | 2009 | 2010 | 2009 | ||
| Allowance for loan losses: | |||||
| Beginning of period | $ 41,525 | $ 34,923 | $ 40,172 | $ 30,464 | |
| Provision for loan losses | 3,500 | 20,050 | 17,550 | 34,300 | |
| Charge-offs | (5,523) | (14,571) | (19,385) | (25,796) | |
| Recoveries | 471 | 638 | 1,636 | 2,072 | |
| Net charge-offs | (5,052) | (13,933) | (17,749) | (23,724) | |
| End of period | $ 39,973 | $ 41,040 | $ 39,973 | $ 41,040 | |
| Accruing Troubled Debt Restructurings | $ 34,827 | $ 5,519 | |||
| Loans greater than 90 days past due still accruing | $ 2,504 | $ 938 | |||
| September 30, | Nine Months Ended September | ||||
| 2010 | 2009 | 2010 | 2009 | ||
| Non accrual loans | $ 48,673 | $ 42,617 | |||
| Non accrual TDR's | 2,411 | -- | |||
| Total non-performing loans | 51,084 | 42,617 | |||
| Loans held for sale | 519 | -- | |||
| Foreclosed assets | 10,535 | 4,189 | |||
| Total non-performing assets | $ 62,138 | $ 46,806 | |||
| Nonperforming assets as a % of total assets | 2.13% | 1.55% | |||
| Nonperforming assets as a % of loans plus foreclosed assets | 2.97% | 2.10% | |||
| Allowance for loan losses as a % of total loans | 1.92% | 1.85% | |||
| Net charge-offs as a % of average loans outstanding | 0.94% | 2.47% | 1.09% | 1.39% | |
| September 30, 2010 | |||||
|
Loans Outstanding |
Nonaccrual Loans |
Nonaccrual Loans to Loans Outstanding |
|||
| Commercial: | |||||
| Commercial & industrial | $ 172,241 | $ 6,588 | 3.82% | ||
| Agriculture | 784 | -- | N/A | ||
| Total commercial | 173,025 | 6,588 | 3.81% | ||
| Commercial real estate: | |||||
| Construction, land development & vacant land | 251,880 | 23,303 | 9.25% | ||
| Non-owner occupied | 356,493 | 3,374 | 0.95% | ||
| Owner occupied | 384,951 | 2,907 | 0.76% | ||
| Farmland | 18,077 | 147 | 0.81% | ||
| Total commercial real estate | 1,011,401 | 29,731 | 2.94% | ||
| Consumer | 32,043 | 16 | 0.05% | ||
| Residential real estate: | |||||
| Residential | 733,305 | 13,210 | 1.80% | ||
| Multi-family | 81,231 | 182 | 0.22% | ||
| Home equity lines | 45,007 | 1,357 | 3.02% | ||
| Total residential | 859,543 | 14,749 | 1.72% | ||
| All other loans | 6,790 | -- | N/A | ||
| Total loans | $ 2,082,802 | $ 51,084 | 2.45% | ||
| QUARTERLY PERFORMANCE SUMMARY | |||
| STELLARONE CORPORATION (NASDAQ: STEL) | |||
| (Dollars in thousands, except per share data) | |||
| Percent | |||
| Increase | |||
| SELECTED BALANCE SHEET DATA | 9/30/2010 | 9/30/2009 | (Decrease) |
| Assets | |||
| Cash and cash equivalents | $ 108,876 | $ 148,398 | -26.63% |
| Securities: | |||
| Securities available for sale | 403,415 | 345,331 | 16.82% |
| Securities held to maturity | -- | 448 | -100.00% |
| Total securities | 403,415 | 345,779 | 16.67% |
| Mortgage loans held for sale | 46,624 | 45,739 | 1.93% |
| Loans: | |||
| Real estate - construction | 269,958 | 319,067 | -15.39% |
| Real estate - 1-4 family residential | 778,312 | 726,788 | 7.09% |
| Real estate - commercial and multifamily | 822,675 | 914,986 | -10.09% |
| Commercial, financial and agricultural | 173,025 | 207,346 | -16.55% |
| Consumer loans | 32,042 | 46,908 | -31.69% |
| All other loans | 6,790 | 6,819 | -0.43% |
| Total loans | 2,082,802 | 2,221,914 | -6.26% |
| Deferred loan costs | 708 | 1,009 | -29.83% |
| Allowance for loan losses | (39,973) | (41,040) | -2.60% |
| Net loans | 2,043,537 | 2,181,883 | -6.34% |
| Premises and equipment, net | 79,737 | 84,834 | -6.01% |
| Core deposit intangibles, net | 7,075 | 8,961 | -21.05% |
| Goodwill | 113,652 | 113,652 | 0.00% |
| Bank owned life insurance | 30,792 | 29,866 | 3.10% |
| Foreclosed assets | 10,535 | 5,437 | 93.76% |
| Other assets | 75,327 | 56,487 | 33.35% |
| Total assets | 2,919,570 | 3,021,036 | -3.36% |
| Liabilities | |||
| Deposits: | |||
| Noninterest bearing deposits | 304,178 | 312,217 | -2.57% |
| Money market & interest checking | 975,578 | 842,536 | 15.79% |
| Savings | 204,390 | 194,885 | 4.88% |
| CD's and other time deposits | 864,758 | 1,054,783 | -18.02% |
| Total deposits | 2,348,904 | 2,404,421 | -2.31% |
|
Federal funds purchased and securities sold under agreements to repurchase |
1,156 | 572 | >100.00% |
| Federal Home Loan Bank advances | 85,000 | 145,000 | -41.38% |
| Subordinated debt | 32,991 | 32,991 | 0.00% |
| Deferred income tax liability | 1,062 | ||
| Other liabilities | 21,003 | 14,353 | 46.33% |
| Total liabilities | 2,490,116 | 2,597,337 | -4.13% |
| Stockholders' equity | |||
| Preferred stock | 28,669 | 28,310 | 1.27% |
| Common stock | 22,748 | 22,661 | 0.38% |
| Additional paid-in capital | 269,870 | 268,852 | 0.38% |
| Retained earnings | 99,748 | 97,776 | 2.02% |
| Accumulated other comprehensive income, net | 8,419 | 6,100 | 38.02% |
| Total stockholders' equity | 429,454 | 423,699 | 1.36% |
| Total liabilities and stockholders' equity | $ 2,919,570 | $ 3,021,036 | -3.36% |
| QUARTERLY PERFORMANCE SUMMARY | |||
| STELLARONE CORPORATION (NASDAQ: STEL) | |||
| (Dollars in thousands) | |||
| Percent | |||
| For the Three Months Ended | Increase | ||
| 9/30/2010 | 9/30/2009 | (Decrease) | |
| Interest Income | |||
| Loans, including fees | $ 28,226 | $ 30,954 | -8.81% |
| Federal funds sold and deposits in other banks | 62 | 74 | -16.22% |
| Investment securities: | |||
| Taxable | 2,134 | 2,107 | 1.28% |
| Tax-exempt | 1,149 | 1,112 | 3.33% |
| Dividends | 11 | 195 | -94.36% |
| Total interest income | 31,582 | 34,442 | -8.30% |
| Interest Expense | |||
| Deposits | 6,744 | 10,857 | -37.88% |
|
Federal funds purchased and securities sold under agreements to repurchase |
8 | 4 | 100.00% |
| Federal Home Loan Bank advances and other borrowings | 1,010 | 1,320 | -23.48% |
| Subordinated debt | 286 | 292 | -2.05% |
| Total interest expense | 8,048 | 12,473 | -35.48% |
| Net interest income | 23,534 | 21,969 | 7.12% |
| Provision for loan losses | 3,500 | 20,050 | -82.54% |
| Net interest income after provision for loan losses | 20,034 | 1,919 | >100.00% |
| Noninterest Income | |||
| Retail banking fees | 4,125 | 4,329 | -4.71% |
| Commissions and fees from fiduciary activities | 818 | 736 | 11.14% |
| Brokerage fee income | 318 | 369 | -13.82% |
| Mortgage banking-related fees | 2,602 | 1,783 | 45.93% |
| Losses on mortgage indemnifications and repurchases | (809) | (55) | >100.00% |
| Losses on sale of premises and equipment | -- | (17) | -100.00% |
| Impairments of securities available for sale | (53) | (1,870) | -97.17% |
| Gains on securities available for sale | 336 | 32 | >100.00% |
| Losses / impairments on foreclosed assets | (18) | (122) | -85.25% |
| Income from bank owned life insurance | 322 | 328 | -1.83% |
| Other operating income | 606 | 378 | >100.00% |
| Total noninterest income | 8,247 | 5,891 | 39.99% |
| Noninterest Expense | |||
| Compensation and employee benefits | 11,687 | 11,027 | 5.99% |
| Net occupancy | 1,996 | 2,121 | -5.89% |
| Supplies and equipment | 1,963 | 2,069 | -5.12% |
| Amortization-intangible assets | 413 | 432 | -4.40% |
| Marketing | 313 | 404 | -22.52% |
| State franchise taxes | 554 | 574 | -3.48% |
| FDIC insurance | 1,617 | 1,159 | 39.52% |
| Data processing | 634 | 391 | 62.15% |
| Professional fees | 656 | 609 | 7.72% |
| Telecommunications | 410 | 452 | -9.29% |
| Other operating expenses | 3,422 | 3,510 | -2.51% |
| Total noninterest expense | 23,665 | 22,748 | 4.03% |
| Income (loss) before income taxes | 4,616 | (14,938) | >100.00% |
| Income tax benefit | 1,088 | (6,043) | >100.00% |
| Net income (loss) | $ 3,528 | $ (8,895) | >100.00% |
| QUARTERLY PERFORMANCE SUMMARY | |||
| STELLARONE CORPORATION (NASDAQ: STEL) | |||
| (Dollars in thousands) | |||
| Percent | |||
| For the Nine Months Ended | Increase | ||
| 9/30/2010 | 9/30/2009 | (Decrease) | |
| Interest Income | |||
| Loans, including fees | $ 86,162 | $ 95,140 | -9.44% |
| Federal funds sold and deposits in other banks | 193 | 158 | 22.15% |
| Investment securities: | |||
| Taxable | 6,560 | 7,262 | -9.67% |
| Tax-exempt | 3,226 | 2,932 | 10.03% |
| Dividends | 71 | 117 | -39.32% |
| Total interest income | 96,212 | 105,609 | -8.90% |
| Interest Expense | |||
| Deposits | 22,953 | 33,868 | -32.23% |
|
Federal funds purchased and securities sold under agreements to repurchase |
22 | 11 | 100.00% |
| Federal Home Loan Bank advances and other borrowings | 3,179 | 4,441 | -28.42% |
| Subordinated debt | 808 | 992 | -18.55% |
| Total interest expense | 26,962 | 39,312 | -31.42% |
| Net interest income | 69,250 | 66,297 | 4.45% |
| Provision for loan losses | 17,550 | 34,300 | -48.83% |
| Net interest income after provision for loan losses | 51,700 | 31,997 | 61.58% |
| Noninterest Income | |||
| Retail banking fees | 12,338 | 12,153 | 1.52% |
| Commissions and fees from fiduciary activities | 2,496 | 2,238 | 11.53% |
| Brokerage fee income | 1,103 | 867 | 27.22% |
| Mortgage banking-related fees | 6,620 | 5,374 | 23.19% |
| Losses on mortgage indemnifications and repurchases | (1,411) | (231) | >100.00% |
| Gain on sale of financial center | 748 | -- | N/A |
| Gains (losses) on sale of premises and equipment | 27 | (107) | >100.00% |
| Impairments of securities available for sale | (53) | (1,870) | -97.17% |
| Gains on securities available for sale | 656 | 44 | >100.00% |
| Losses / impairments on foreclosed assets | (459) | (797) | -42.41% |
| Income from bank owned life insurance | 972 | 962 | 1.04% |
| Other operating income | 2,405 | 2,055 | 17.03% |
| Total noninterest income | 25,442 | 20,688 | 22.98% |
| Noninterest Expense | |||
| Compensation and employee benefits | 34,095 | 32,390 | 5.26% |
| Net occupancy | 6,218 | 6,375 | -2.46% |
| Supplies and equipment | 6,295 | 6,475 | -2.78% |
| Amortization-intangible assets | 1,238 | 1,305 | -5.13% |
| Marketing | 786 | 914 | -14.00% |
| State franchise taxes | 1,662 | 1,744 | -4.70% |
| FDIC insurance | 4,048 | 4,352 | -6.99% |
| Data processing | 1,741 | 1,893 | -8.03% |
| Professional fees | 2,071 | 1,602 | 29.28% |
| Telecommunications | 1,256 | 1,396 | -10.03% |
| Other operating expenses | 9,593 | 10,436 | -8.08% |
| Total noninterest expense | 69,003 | 68,882 | 0.18% |
| Income (loss) before income taxes | 8,139 | (16,197) | >100.00% |
| Income tax expense (benefit) | 1,203 | (7,121) | >100.00% |
| Net income (loss) | $ 6,936 | $ (9,076) | >100.00% |
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||
| CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES | ||||||
| THREE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 | ||||||
| (Dollars in thousands) | ||||||
|
For the Three Months Ended September 30, (unaudited) |
||||||
| 2010 | 2009 | |||||
| Dollars in thousands |
Average Balance |
Interest Inc/Exp |
Average Rates |
Average Balance |
Interest Inc/Exp |
Average Rates |
| Assets | ||||||
| Loans receivable, net | $ 2,144,270 | $ 28,274 | 5.23% | $ 2,260,411 | $ 31,055 | 5.45% |
| Investment securities | ||||||
| Taxable | 279,963 | 2,143 | 3.00% | 232,267 | 2,302 | 3.88% |
| Tax exempt | 117,933 | 1,769 | 5.87% | 111,982 | 1,710 | 5.98% |
| Total investments | 397,896 | 3,912 | 3.85% | 344,249 | 4,012 | 4.56% |
| Interest bearing deposits | 61,574 | 37 | 0.24% | 54,109 | 36 | 0.26% |
| Federal funds sold | 39,114 | 25 | 0.25% | 69,632 | 38 | 0.21% |
| 498,584 | 3,974 | 3.12% | 467,990 | 4,086 | 3.42% | |
| Total earning assets | 2,642,854 | $ 32,248 | 4.84% | 2,728,401 | $ 35,141 | 5.11% |
| Total nonearning assets | 334,751 | 322,934 | ||||
| Total assets | $ 2,977,605 | $ 3,051,335 | ||||
| Liabilities and Stockholders' Equity | ||||||
| Interest-bearing deposits | ||||||
| Interest checking | $ 558,996 | $ 583 | 0.41% | $ 536,184 | $ 1,276 | 0.94% |
| Money market | 398,846 | 1,117 | 1.11% | 312,479 | 1,199 | 1.52% |
| Savings | 235,379 | 443 | 0.75% | 194,314 | 431 | 0.88% |
| Time deposits: | ||||||
| Less than $100,000 | 594,434 | 2,933 | 1.96% | 713,888 | 5,071 | 2.82% |
| $100,000 and more | 283,747 | 1,668 | 2.33% | 359,362 | 2,880 | 3.18% |
| Total interest-bearing deposits | 2,071,402 | 6,744 | 1.29% | 2,116,227 | 10,857 | 2.04% |
|
Federal funds purchased and securities sold under agreements to repurchase |
1,087 | 8 | 2.88% | 554 | 4 | 2.95% |
| Federal Home Loan Bank advances and other borrowings | 118,587 | 1,010 | 3.33% | 145,000 | 1,320 | 3.56% |
| Subordinated debt | 32,991 | 286 | 3.39% | 32,991 | 292 | 3.46% |
| 152,665 | 1,304 | 3.34% | 178,545 | 1,616 | 3.54% | |
| Total interest-bearing liabilities | 2,224,067 | 8,048 | 1.43% | 2,294,772 | 12,473 | 2.16% |
| Total noninterest-bearing liabilities | 325,307 | 328,219 | ||||
| Total liabilities | 2,549,374 | 2,622,991 | ||||
| Stockholders' equity | 428,231 | 428,344 | ||||
| Total liabilities and stockholders' equity | $ 2,977,605 | $ 3,051,335 | ||||
| Net interest income (tax equivalent) | $ 24,200 | $ 22,668 | ||||
| Average interest rate spread | 3.41% | 2.95% | ||||
| Interest expense as percentage of average earning assets | 1.21% | 1.81% | ||||
| Net interest margin | 3.63% | 3.30% | ||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||
| CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES | ||||||
| NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 | ||||||
| (Dollars in thousands) | ||||||
|
For the Nine Months Ended September 30, (unaudited) |
||||||
| 2010 | 2009 | |||||
| Dollars in thousands |
Average Balance |
Interest Inc/Exp |
Average Rates |
Average Balance |
Interest Inc/Exp |
Average Rates |
| Assets | ||||||
| Loans receivable, net | $ 2,172,148 | $ 86,311 | 5.31% | $ 2,278,781 | $ 95,455 | 5.60% |
| Investment securities | ||||||
| Taxable | 269,614 | 6,631 | 3.24% | 229,777 | 7,379 | 4.23% |
| Tax exempt | 109,296 | 4,963 | 5.99% | 97,682 | 4,511 | 6.09% |
| Total investments | 378,910 | 11,594 | 4.03% | 327,459 | 11,890 | 4.79% |
| Interest bearing deposits | 55,560 | 95 | 0.23% | 51,972 | 80 | 0.20% |
| Federal funds sold | 51,298 | 98 | 0.25% | 48,691 | 78 | 0.21% |
| 485,768 | 11,787 | 3.20% | 428,122 | 12,048 | 3.71% | |
| Total earning assets | 2,657,916 | $ 98,098 | 4.93% | 2,706,903 | $ 107,503 | 5.31% |
| Total nonearning assets | 329,185 | 324,720 | ||||
| Total assets | $ 2,987,101 | $ 3,031,623 | ||||
| Liabilities and Stockholders' Equity | ||||||
| Interest-bearing deposits | ||||||
| Interest checking | $ 563,238 | $ 2,817 | 0.67% | $ 525,761 | $ 3,928 | 1.00% |
| Money market | 393,675 | 3,532 | 1.20% | 274,671 | 3,076 | 1.50% |
| Savings | 219,969 | 1,374 | 0.84% | 191,522 | 1,261 | 0.88% |
| Time deposits: | ||||||
| Less than $100,000 | 617,562 | 9,884 | 2.14% | 756,730 | 17,056 | 3.01% |
| $100,000 and more | 295,455 | 5,346 | 2.42% | 329,713 | 8,547 | 3.47% |
| Total interest-bearing deposits | 2,089,899 | 22,953 | 1.47% | 2,078,397 | 33,868 | 2.18% |
| Federal funds purchased and securities sold under agreements to repurchase | 967 | 22 | 2.95% | 455 | 11 | 3.19% |
| Federal Home Loan Bank advances and other borrowings | 122,857 | 3,179 | 3.41% | 166,319 | 4,441 | 3.52% |
| Subordinated debt | 32,991 | 808 | 3.23% | 32,991 | 992 | 3.97% |
| 156,815 | 4,009 | 3.37% | 199,765 | 5,444 | 3.59% | |
| Total interest-bearing liabilities | 2,246,714 | 26,962 | 1.60% | 2,278,162 | 39,312 | 2.30% |
| Total noninterest-bearing liabilities | 315,705 | 323,199 | ||||
| Total liabilities | 2,562,419 | 2,601,361 | ||||
| Stockholders' equity | 424,682 | 430,262 | ||||
| Total liabilities and stockholders' equity | $ 2,987,101 | $ 3,031,623 | ||||
| Net interest income (tax equivalent) | $ 71,136 | $ 68,191 | ||||
| Average interest rate spread | 3.33% | 3.01% | ||||
| Interest expense as percentage of average earning assets | 1.36% | 1.94% | ||||
| Net interest margin | 3.58% | 3.37% | ||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||
| FINANCIAL INFORMATION - FOUR QUARTER TREND | ||||
| (Dollars in thousands, except per share data) | ||||
| Quarter Ended | ||||
|
September 30, 2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
|
| Interest income | 31,582 | 32,150 | 32,481 | 34,106 |
| Interest expense | 8,048 | 8,932 | 9,982 | 11,200 |
| Net interest income | 23,534 | 23,218 | 22,499 | 22,906 |
| Provision for loan losses | 3,500 | 7,350 | 6,700 | 3,500 |
| Total net interest income after provision | 20,034 | 15,868 | 15,799 | 19,406 |
| Non interest income | 8,247 | 8,380 | 8,814 | 5,540 |
| Non interest expense | 23,665 | 22,791 | 22,547 | 24,875 |
| Income (loss) before income taxes | 4,616 | 1,457 | 2,066 | 71 |
| Income tax (benefit) expense | 1,088 | (96) | 212 | (474) |
| Net income (loss) | 3,528 | 1,553 | 1,854 | 545 |
| Preferred stock dividends | (378) | (374) | (370) | (378) |
| Accretion of preferred stock discount | (92) | (91) | (88) | (88) |
| Net income (loss) available to common shareholders | 3,058 | 1,088 | 1,396 | 79 |
| Net income (loss) per share | ||||
| basic | 0.13 | 0.05 | 0.06 | -- |
| diluted | 0.13 | 0.05 | 0.06 | -- |
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||
| SEGMENT INFORMATION | ||||||
| (Dollars in thousands) | ||||||
| At and for the Three Months Ended September 30, 2010 (In thousands): | ||||||
|
Commercial Bank |
Mortgage Banking |
Wealth Management |
Other |
Intersegment Elimination |
Consolidated | |
| Net interest income | $ 23,437 | $ 383 | $ -- | $ (286) | $ -- | $ 23,534 |
| Provision for loan losses | 3,500 | -- | -- | -- | -- | 3,500 |
| Noninterest income | 6,129 | 1,857 | 1,136 | 213 | (1,088) | 8,247 |
| Noninterest expense | 21,197 | 2,032 | 997 | 527 | (1,088) | 23,665 |
| Provision for income taxes | 1,208 | 62 | 42 | (224) | -- | 1,088 |
| Net income (loss) | $ 3,661 | $ 146 | $ 97 | $ (376) | $ -- | $ 3,528 |
| Total Assets | $ 2,855,275 | $ 47,977 | $ 654 | $ 466,998 | $ (451,334) | $ 2,919,570 |
| Average Assets | $ 2,918,727 | $ 41,029 | $ 330 | $ 465,035 | $ (447,516) | $ 2,977,605 |
| At and for the Three Months Ended September 30, 2009 (In thousands): | ||||||
|
Commercial Bank |
Mortgage Banking |
Wealth Management |
Other |
Intersegment Elimination |
Consolidated | |
| Net interest income | $ 21,817 | $ 443 | $ -- | $ (291) | $ -- | $ 21,969 |
| Provision for loan losses | 20,050 | -- | -- | -- | -- | 20,050 |
| Noninterest income | 5,713 | 1,781 | 1,105 | (1,657) | (1,051) | 5,891 |
| Noninterest expense | 20,904 | 1,429 | 915 | 551 | (1,051) | 22,748 |
| Provision for income taxes | (5,027) | 239 | 57 | (1,312) | -- | (6,043) |
| Net income (loss) | $ (8,397) | $ 556 | $ 133 | $ (1,187) | $ -- | $ (8,895) |
| Total Assets | $ 2,914,691 | $ 48,134 | $ 635 | $ 461,093 | $ (403,517) | $ 3,021,036 |
| Average Assets | $ 2,949,156 | $ 42,057 | $ 406 | $ 464,863 | $ (405,147) | $ 3,051,335 |
| At and for the Nine Months Ended September 30, 2010 (In thousands): | ||||||
|
Commercial Bank |
Mortgage Banking |
Wealth Management |
Other |
Intersegment Elimination |
Consolidated | |
| Net interest income | $ 69,010 | $ 1,049 | $ -- | $ (809) | $ -- | $ 69,250 |
| Provision for loan losses | 17,550 | -- | -- | -- | -- | 17,550 |
| Noninterest income | 20,281 | 5,269 | 2,463 | 638 | (3,209) | 25,442 |
| Noninterest expense | 63,245 | 5,469 | 1,948 | 1,550 | (3,209) | 69,003 |
| Provision for income taxes | 1,457 | 255 | 155 | (664) | -- | 1,203 |
| Net income (loss) | $ 7,039 | $ 594 | $ 360 | $ (1,057) | $ -- | $ 6,936 |
| Average Assets | $ 2,933,782 | $ 35,528 | $ 340 | $ 461,711 | $ (444,260) | $ 2,987,101 |
| At and for the Nine Months Ended September 30, 2009 (In thousands): | ||||||
|
Commercial Bank |
Mortgage Banking |
Wealth Management |
Other |
Intersegment Elimination |
Consolidated | |
| Net interest income | $ 66,044 | $ 1,241 | $ -- | $ (988) | $ -- | $ 66,297 |
| Provision for loan losses | 34,300 | -- | -- | -- | -- | 34,300 |
| Noninterest income | 17,988 | 5,144 | 1,999 | (1,291) | (3,152) | 20,688 |
| Noninterest expense | 64,142 | 4,700 | 1,861 | 1,331 | (3,152) | 68,882 |
| Provision for income taxes | (6,343) | 506 | 41 | (1,325) | -- | (7,121) |
| Net income (loss) | $ (8,067) | $ 1,179 | $ 97 | $ (2,285) | $ -- | $ (9,076) |
| Average Assets | $ 2,932,227 | $ 39,386 | $ 476 | $ 466,409 | $ (406,875) | $ 3,031,623 |