ELKIN, NC — (Marketwired) — 07/25/13 — Yadkin Financial Corporation (NASDAQ: YDKN)
Net income available to common shareholders for the second quarter of 2013 was $4.2 million, or $0.30 per diluted share.
The average net interest margin for the quarter was 3.90%, an increase of 33 basis points compared to the prior quarter.
Total loan balances increased $10.5 million compared to the prior quarter — our first quarterly increase in more than 2 years.
Net interest income increased $1.1 million compared to the prior quarter due primarily to decreased deposit interest expense.
The Company successfully completed its rebranding initiative and the 1-for-3 reverse stock split during the second quarter.
Yadkin Financial Corporation (NASDAQ: YDKN), the holding company for Yadkin Bank, announced today financial results for the second quarter ended June 30, 2013. Net income available to common shareholders for the quarter was $4.2 million, or $0.30 per diluted share, compared to net income of $4.2 million, or $0.30 per diluted share, in the first quarter of 2013, and net income of $10.2 million, or $1.57 per diluted share, in the second quarter of 2012.
Joe Towell, President and CEO of Yadkin Financial, commented, “I-m very pleased to report another quarter of solid performance. Our main area of focus in 2013 is solid profitability, and we have delivered on that goal through the first half of the year. We are also maintaining our clean credit profile, which is key to delivering core earnings. Our net interest margin expanded nicely this quarter, as we continue to drive net interest income through loan growth and improving our deposit mix.
“During the second quarter, the Company hit several major milestones: we completed our rebranding initiative, with all divisions of the Company now operating under the Yadkin name; we effected our 1-for-3 reverse stock split; and we were included in the Russell 2000® Small Cap Index. Those items, along with $4.2 million in net income, add up to a very positive quarter and yet another important pillar in the strength of the Yadkin story. Our performance continues to produce strong results, and our Board, management team, and employees are focused on the future. We are looking forward to continued success throughout the second half of 2013.”
The Bank-s key asset quality metrics continue to be strong as we maintain a clean credit profile. First, our adversely classified items to Tier 1 capital and loan loss reserve ratio has continued to decrease, down to 22.34% at the end of the second quarter. Our nonperforming loans decreased $4.0 million compared to the prior quarter, to $19.7 million. In addition, nonperforming loans to total loans ratio decreased to 1.47% at June 30, 2013, compared to 1.79% at March 31, 2013.
Other real estate owned (OREO) totaled $3.8 million at June 30, 2013, a decrease of $1.6 million compared to $5.4 million at March 31, 2013. We sold a large portion of our commercial OREO as part of our accelerated asset disposition plan, and we continue to have success moving our residential properties. Total nonperforming assets at June 30, 2013 were $23.5 million, or 1.30% of total assets, a decrease of $5.7 million from March 31, 2013.
During the second quarter of 2013, the provision for loan losses was $55,000, a decrease of $182,000 from the first quarter of 2013. This decrease is due to the continued clean credit profile of the Company following the completion of the accelerated asset disposition plan. Total net charge-offs for the second quarter of 2013 were $1.6 million, or 0.49% of average loans on an annualized basis.
At June 30, 2013, the allowance for loan losses was $22.9 million, compared to $24.5 million at March 31, 2013. As a percentage of total loans held-for-investment, the allowance for loan losses was 1.74% in the second quarter of 2013, down from 1.88% in the first quarter of 2013. While credit quality has improved, the reserve remains at a conservative level due to continued economic uncertainty and other external factors in our markets. Out of the $22.9 million in total allowance for loan losses at June 30, 2013, the specific allowance for impaired loans accounted for $2.0 million, down from $2.1 million in the first quarter. The remaining general allowance of $20.9 million attributed to unimpaired loans was down from $22.4 million at the end of the first quarter.
Net interest income was up $1.1 million quarter over quarter, totaling $16.1 million for the second quarter of 2013. We also experienced a significant increase in our net interest margin. The quarterly average margin increased 33 basis points to 3.90%, up from 3.57% at March 31, 2013. This increase in margin is due primarily to a continued decrease in deposit interest expense.
In the second quarter of 2013, we continued to strategically shift our deposit mix and lower our cost of deposits. Core deposits now represent 61.7% of total deposits, our highest percentage in the last eight quarters, as we focus on core deposit growth. As a result of this strategy, our cost of deposits decreased to 0.55% for the quarter as compared to 0.71% in the first quarter of 2013.
Non-interest income increased $527,000 to $6.2 million compared to $5.7 million in the first quarter of 2013. This increase is due primarily to the increase in service fees this quarter.
Non-interest expense increased in the second quarter of 2013 to $14.8 million as compared to $13.2 million in the first quarter of 2013. We expect part of this increase to be unique to the second quarter as we recorded many of the budgeted expenses related to our rebranding initiative during the quarter.
Total assets decreased $44.7 million during the second quarter of 2013. However, for the first time in the last two years, we had an increase in total loans, up $10.5 million compared to the prior quarter. The decrease in total deposits of $38.6 million consisted primarily of a reduction in higher cost time deposits. Core deposits increased $25.1 million compared to the prior quarter.
The Company-s capital ratios have strengthened and continue to exceed all regulatory requirements. As of June 30, 2013, the Bank-s leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 10.3%, 12.5%, and 13.7%, respectively. Leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 10.6%, 12.8%, and 14.0% respectively, for the holding company as of June 30, 2013. In addition, the Company-s tangible common equity to total tangible assets ratio was 8.0% at the end of the second quarter, compared to 7.8% at March 31, 2013. For capital adequacy purposes, leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio must be in excess of 5.0%, 6.0%, and 10.0%, respectively, to be considered well-capitalized.
Yadkin Financial Corporation will host a conference call at 10:00 a.m. EDT on Thursday, July 25, 2013 to discuss financial results, business highlights, and outlook. The call may be accessed by dialing 877-359-3650 at least 10 minutes prior to the call. A webcast of the call audio may be accessed at . A replay of the call will be available until July 31, 2013 by dialing 855-859-2056 or 404-537-3406 and entering Conference ID 20307852.
Yadkin Financial Corporation is the holding company for Yadkin Bank, a full-service community bank with 33 branches throughout its two regions in North Carolina and South Carolina. The Western Region serves Avery, Watauga, Ashe, Surry, Wilkes, Yadkin, and Iredell Counties. The Southern Region serves Durham, Orange, Mecklenburg, and Union Counties in North Carolina, and Cherokee and York Counties in South Carolina. The Bank provides mortgage-lending services through its mortgage division, Yadkin Mortgage, headquartered in Greensboro, NC. Securities brokerage services are provided by Yadkin Wealth, Inc., a Bank subsidiary with offices located throughout branch network. Yadkin Financial Corporation-s website is . Yadkin shares are traded on NASDAQ under the symbol YDKN.
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This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. Forward looking statements generally include words such as “expects,” “projects,” “anticipates,” “believes,” “intends,” “estimates,” “strategy,” “plan,” “potential,” “possible” and other similar expressions. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those anticipated in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of some factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled “Forward-Looking Statements” on pages 44-45 of Yadkin Financial Corporation-s quarterly report filed on Form 10-Q with the SEC for the quarter ended June 30, 2013 and in the sections entitled “Risk Factors” in quarterly reports filed on Form 10-Q for the quarters ended March 31, 2013, September 30, 2012, and June 30, 2012, and annual report filed on Form 10-K for the year ended December 31, 2012. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements.
For additional information contact:
Joseph H. Towell
President and Chief Executive Officer
(704) 768-1133
Jan H. Hollar
Executive Vice President and Chief Financial Officer
(704) 768-1161