CHARLOTTESVILLE, Va., July 25, 2013 (GLOBE NEWSWIRE) -- StellarOne Corporation (Nasdaq:STEL) ("StellarOne"), today reported second quarter 2013 net income of $6.3 million, or $0.28 net income per diluted common share. This represents a 29.4% increase over net income of $4.9 million or $0.21 per diluted common share recognized during the same quarter in the prior year, and represents a 6.9% increase over net income of $5.9 million or $0.26 per diluted share in the first quarter of 2013.
For the six months ended June 30, 2013, earnings were $12.2 million or $0.53 per diluted common share, up 17.8% compared to $10.4 million or $0.45 per diluted common share in 2012.
On June 10, 2013 StellarOne announced that it will merge with Union First Market Bankshares Corporation (Nasdaq:UBSH) (or "Union"), creating the largest community banking institution in the Commonwealth of Virginia. Under the terms of the agreement, Union will acquire StellarOne, with common shareholders of StellarOne receiving 0.9739 shares of Union common stock for each share of StellarOne. The transaction is subject to shareholder and regulatory approvals, and is expected to close on or around January 1, 2014.
"The quarter marked a significant event in our company's history with the announced merger with Union. This merger represents a tremendous opportunity to create Virginia's next great bank which will benefit our customers, shareholders and employees," said O. R. Barham, Jr., President and Chief Executive Officer. "While not indicative of future performance, the market has reacted favorably to the combination as evidenced by our stock's performance since our announcement. We have begun the process to seek required approvals from shareholders and regulators and have commenced to collaborate on integration plans."
"Our second quarter results are indicative of our commitment to continue our positive momentum as we begin to focus on integrating our fine companies. The quarterly results note improving profitability metrics and asset quality levels, loan growth coupled with strong wealth management and mortgage revenues allowed for a relatively stable net interest margin and resulting revenue growth over both the previous quarter and same quarter last year."
Second quarter financial performance highlights included:
- Earnings were impacted by $871 thousand in merger related expenses for the quarter associated with the announced merger with Union.
- Operating earnings for the quarter, excluding the impact of such merger costs, were $7.2 million or $0.32 per diluted share and the ROA and ROE associated with operating earnings were 0.97% and 6.83% or up from 0.67% and 4.67% when compared to the second quarter of 2012, respectively.
- Revenue growth improved, with net revenues totaling $32.8 million, up $765 thousand or 2.4% as compared to $32.0 million for second quarter last year.
- Pre-tax, pre-provision earnings were $9.5 million, up $720 thousand or 8.2% over the $8.8 million recognized for the second quarter last year.
- Total loans increased 7.2% compared to the second quarter of 2012 and 1.9% compared to the first quarter of 2013 due primarily to organic loan growth in the Construction and Commercial Real Estate portfolios.
- Nonperforming asset levels improved to $30.2 million, a decrease of $12.3 million or 29.0% from 2012, lowering the ratio of non-performing assets as a percentage of total assets to 1.0% as of June 30, 2013, compared to 1.43% as of June 30, 2012.
- Annualized net charge-offs as a percentage of average loans receivable amounted to 0.24% for the second quarter of 2013, down from 0.28% for the first quarter of 2013 and down from 0.56% for same quarter last year.
Net Interest Margin Contracts Slightly
The net interest margin was 3.73% for the second quarter of 2013, compared to 3.78% for the first quarter of 2013 and 3.84% for the second quarter of 2012. The average yield on earning assets for the current quarter decreased 10 basis points to 4.27% on a sequential basis. Loan and investment yields contracted 15 basis points and 3 basis points, respectively, on a sequential basis. Loan yields contracted due to re-pricing within the current portfolio and reduced yields on new production. Investment yields contracted due to lower yields realized on the recent investment activity in the current low rate environment. Continued reductions in deposit costs are reflected by the 6 basis point improvement in the cost of interest bearing liabilities noted sequentially, moving from 0.72% during the first quarter of 2013 to 0.66% during the second quarter of 2013. Revenue associated with net interest income on a tax-equivalent basis remained stable at $25.0 million for the second quarter of 2013, compared to $24.9 million for the second quarter last year and $24.9 million in the first quarter of 2013.
Operating Noninterest Income Increases
On an operating basis, which excludes gains and losses from sales and impairments of securities and other assets, total non-interest income amounted to $7.8 million for the second quarter of 2013, up $397 thousand or 5.3% on a sequential basis compared to $7.4 million for the first quarter of 2013, and up $779 thousand or 11.0% compared to the second quarter last year. The sequential quarter increase in operating noninterest income stemmed largely from continued strong production volumes from our mortgage segment. The majority of the increase for the same quarter compared to the prior year is related to increases in wealth management fee income, insurance income, retail banking fees and loan swap fee income.
Mortgage banking-related fees totaled $1.9 million for the second quarter of 2013, or up $92 thousand or 5.0% compared to $1.8 million for the first quarter of 2013 and up $546 thousand, or 39.5%, compared to $1.4 million in the same quarter in 2012. Loans sold in the second quarter of 2013 totaled $76.6 million or down $2.4 million or 3.0% from the $79.0 million sold during the first quarter of 2013. The mortgage segment contributed after-tax earnings of $701 thousand for the current quarter, compared to $482 thousand last quarter, and $209 thousand for same quarter last year.
Losses on foreclosed assets were $244 thousand for the quarter, an increase of $25 thousand or 11.4% compared to $219 thousand for the same quarter in 2012. Other operating income decreased $250 thousand during the quarter due to a contraction of revenues associated with commercial lending loan swap fee income.
Retail banking fee income totaled $3.5 million for the second quarter of 2013, an increase of $404 thousand or 13.2% sequentially and increased $190 thousand or 5.8% over the same quarter in 2012. An increase in overdraft revenue led to the sequential and year over year increases while all other retail banking revenue streams remained stable when compared to both periods.
Wealth management revenues from trust and brokerage fees for the second quarter of 2013 were $1.39 million or up $161 thousand or 13.1% on a sequential quarter basis and up $207 thousand or 17.5% when compared to the second quarter of 2012. Revenue increases for both comparisons are a result of higher fee realizations and growth in assets. Fiduciary assets amounted to $539.7 million at June 30, 2013, compared to $456.6 million at December 31, 2013. After-tax earnings were $271 thousand for the quarter, compared to $135 thousand sequentially and $101 thousand for the same quarter last year.
Net Charge-Offs Decrease and Overall Asset Quality Improves
Non-performing assets totaled $30.2 million at June 30, 2013, down $7.7 million or 20.3% sequentially from $37.9 million at March 31, 2013 and down $12.3 million or 29.0% compared to $42.5 million at June 30, 2012. The ratio of non-performing assets as a percentage of total assets dropped to 1.0% as of June 30, 2013, compared to 1.36% as of March 31, 2013 and was also down when compared to 1.43% at June 30, 2012.
Net charge-offs for the second quarter of 2013 totaled $1.3 million, decreased $175 thousand or 11.9% compared to the $1.5 million for the first quarter of 2013 and down $1.6 million or 54.8% when compared to $2.9 million for the second quarter of 2012. Annualized net charge-offs as a percentage of average loans receivable amounted to 0.24% for the second quarter of 2013, down from 0.28% for the first quarter of 2013 and down from 0.56% for the second quarter of 2012. StellarOne recorded a credit to the provision for loan losses of $385 thousand for the second quarter of 2013, a decrease of $1.1 million compared to the $700 thousand charged for the first quarter of 2013 and a decrease of $1.8 million compared to the second quarter of 2012. The decreased provisioning throughout 2013 is reflective of the continued improvement in underlying credit quality metrics used in measuring the risk inherent in the loan portfolio.
The allowance as a percentage of non-performing loans was 104.7% at June 30, 2013, or higher than the 92.3% at March 31, 2013. The allowance for loan losses was $27.4 million at June 30, 2013, compared to $29.1 million at March 31, 2013. The allowance as a percentage of total loans was 1.25% at June 30, 2013, compared to 1.36% at March 31, 2013.
Foreclosed assets totaled $4.1 million at June 30, 2013, down $2.3 million or 35.9% compared to $6.4 million at March 31, 2013 and down $2.9 million or 41.6% compared to $7.0 million at June 30, 2012.
Included in the loan portfolio at June 30, 2013, are loans classified as troubled debt restructurings ("TDRs") totaling $20.6 million or 0.94% of total loans. TDRs were reduced sequentially by 10.7% or $2.4 million as compared to $23.0 million at March 31, 2013. At June 30, 2013, $18.5 million or 89.8% of total TDRs were performing under the modified terms.
Operating Expenses Increase on Merger Costs
Noninterest expenses were $23.3 million for the second quarter of 2013, up sequentially by $483 thousand or 2.1% compared to $22.8 million in the first quarter of 2013, and down $45 thousand or 0.2% compared to second quarter of 2012.
The sequential quarter increase in noninterest expense was driven by $871 thousand in merger related costs associated with pending merger with Union. Excluding the non-recurring merger costs, operating expenses would have been $22.4 million, down $389 thousand or 1.7% sequentially, and down $826 thousand or 3.6% compared to same quarter last year. Compensation and benefits were $12.0 million for the second quarter of 2013, down sequentially by $444 thousand or 3.6% compared to $12.4 million in the first quarter of 2013, and down $843 thousand or 6.6% compared to second quarter of 2012. The decrease sequentially was attributable to a reduction in incentive costs and ongoing efficiency efforts. The decrease relative to 2012 was related to $824 thousand in severance costs incurred in second quarter 2012, along with ongoing efficiency initiatives.
The efficiency ratio was 66.81% for the second quarter of 2013, compared to 69.19% for the first quarter of 2013 and 70.74% for the same quarter in 2012. The sequential quarter improvement reflects revenue growth for the quarter coupled with lower operating expenses. The year over year decrease reflects similar trends, improved revenue and operating expenses, but also reflects the impact of severance costs on the second quarter 2012 efficiency ratio.
Effective Tax Rate
The provision for income taxes was $2.9 million for the second quarter of 2013 compared to $2.3 million for the first quarter of 2013, and $1.8 million for the same quarter last year. This produced an effective tax rate for the second quarter of 2013 of 31.6% compared to 27.6% for the prior quarter and 26.6% for same quarter last year. The increase in the tax rate as compared to sequential and prior year effective tax rates was due to the impact of $758 thousand in merger costs incurred during the quarter which are non-deductible for tax purposes. For the first six months of 2013 the effective rate was 29.7%, compared to 27.2% for same period prior year.
Balance Sheet Trends
Period end loans increased $41.5 million sequentially or 1.94% compared to the first quarter of 2013, while average loans for the second quarter of 2013 were $2.16 billion, up $47.1 million or 2.23% compared to the first quarter of 2013. Average securities were $487.7 million for the second quarter, down $23.6 million or 4.6% from $511.3 million for the second quarter of 2012. Average deposits for the second quarter of 2013 were $2.5 billion or essentially flat on a sequential quarter basis compared to the first quarter of 2013. Average interest and noninterest bearing demand deposit accounts were $1.0 billion at June 30, 2013, an $18.8 million or 1.91% increase over March 31, 2013. At June 30, 2013, total period end assets were $3.0 billion, compared to $3.0 billion at March 31, 2013. Period end cash and cash equivalents were $51.7 million at June 30, 2013, a decrease of $14.8 million or 22.3% compared to $66.5 million at March 31, 2013.
Quarterly Dividend Approved
The Board of Directors of StellarOne has approved a third quarter dividend of $0.10 per share, payable on August 26, 2013 to shareholders of record on August 6, 2013. This dividend equals the $0.10 share paid in the second quarter of 2013, and represents an increase of $0.04 or 67% over the $0.06 paid in third quarter 2013.
About StellarOne
StellarOne Corporation is a traditional community bank with assets of $3.0 billion offering a full range of business and consumer banking services, including trust and wealth management services. Through the activities of our sole subsidiary, StellarOne Bank, we operate over 50 full-service financial centers, two loan production offices, and over 60 ATMs serving the New River Valley, Roanoke Valley, Shenandoah Valley, Richmond, Tidewater, and Central and North Central Virginia.
Non-GAAP Financial Measures
This report refers to the efficiency ratio, which is computed by calculating noninterest expense less amortization of intangibles and goodwill impairments and dividing this by the sum of net interest income on a tax equivalent basis and non-interest income excluding gains on securities and losses on foreclosed assets. The report also refers to operating earnings and noninterest income, which reflects both earnings and noninterest income adjusted for non-recurring expenses associated with asset gains and losses or expenses that are unusual in nature. Comparison of our efficiency ratio and operating earnings with those of other companies may not be possible because other companies may calculate them differently. Pre-tax, pre-provision earnings, which adjusts for tax equivalent items and 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 ratio is used by management to assess the quality of capital and management believes that investors may find it useful in their analysis of the company. This capital measure is 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 management believes provide investors with important information regarding 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, 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.
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||
| SELECTED FINANCIAL DATA (UNAUDITED) | ||||||||
| (Dollars in thousands, except per share data) | ||||||||
| SUMMARY INCOME STATEMENT | Three Months Ended June 30, | Six Months Ended June 30, | ||||||
| 2013 | 2012 | 2013 | 2012 | |||||
| Interest income - taxable equivalent | $ 28,562 | $ 29,689 | $ 57,325 | $ 59,373 | ||||
| Interest expense | 3,612 | 4,754 | 7,477 | 9,817 | ||||
| Net interest income - taxable equivalent | 24,950 | 24,935 | 49,848 | 49,556 | ||||
| Less: taxable equivalent adjustment | 678 | 755 | 1,377 | 1,481 | ||||
| Net interest income | 24,272 | 24,180 | 48,471 | 48,075 | ||||
| Provision for loan and lease losses | (385) | 1,400 | 315 | 2,250 | ||||
| Net interest income after provision for loan and lease losses | 24,657 | 22,780 | 48,156 | 45,825 | ||||
| Noninterest income | 7,826 | 7,076 | 15,265 | 14,045 | ||||
| Noninterest expense | 23,252 | 23,207 | 46,022 | 45,606 | ||||
| Income tax expense | 2,914 | 1,768 | 5,171 | 3,882 | ||||
| Net income | $ 6,317 | $ 4,881 | $ 12,228 | $ 10,382 | ||||
| Earnings per share available to common shareholders | ||||||||
| Basic | $ 0.28 | $ 0.21 | $ 0.53 | $ 0.45 | ||||
| Diluted | $ 0.28 | $ 0.21 | $ 0.53 | $ 0.45 | ||||
| SUMMARY AVERAGE BALANCE SHEET | Three Months Ended June 30, | Six Months Ended June 30, | ||||||
| 2013 | 2012 | 2013 | 2012 | |||||
| Total loans | $ 2,181,889 | $ 2,051,477 | $ 2,161,974 | $ 2,053,153 | ||||
| Total investment securities | 487,693 | 511,295 | 496,815 | 486,265 | ||||
| Total earning assets | 2,683,831 | 2,613,278 | 2,677,706 | 2,594,332 | ||||
| Total assets | 3,009,479 | 2,937,391 | 3,001,180 | 2,917,506 | ||||
| Total deposits | 2,462,887 | 2,408,473 | 2,457,768 | 2,391,180 | ||||
| Shareholders' equity | 426,066 | 420,706 | 428,391 | 418,852 | ||||
| PERFORMANCE RATIOS | Three Months Ended June 30, | Six Months Ended June 30, | ||||||
| 2013 | 2012 | 2013 | 2012 | |||||
| Return on average assets | 0.84% | 0.67% | 0.82% | 0.72% | ||||
| Return on average equity | 5.95% | 4.67% | 5.76% | 4.98% | ||||
| Return on average realized equity (A) | 6.06% | 4.78% | 5.87% | 5.06% | ||||
| Net interest margin (taxable equivalent) | 3.73% | 3.84% | 3.75% | 3.84% | ||||
| Efficiency (taxable equivalent) (B) | 66.81% | 70.74% | 67.99% | 69.76% | ||||
| CAPITAL MANAGEMENT | June 30, | |||||||
| 2013 | 2012 | |||||||
| Tangible equity ratio | 10.65% | 10.60% | ||||||
| Tangible common equity ratio | 10.65% | 10.60% | ||||||
| Period end shares issued and outstanding | 22,519,050 | 22,874,676 | ||||||
| Book value per common share | 18.93 | 18.45 | ||||||
| Tangible book value per common share | 13.70 | 13.26 | ||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||
| 2013 | 2012 | 2013 | 2012 | |||||
| Shares issued (cancelled) | (59,934) | 27,823 | (369,926) | 87,031 | ||||
| Average common shares issued and outstanding | 22,725,727 | 23,089,473 | 22,859,821 | 23,076,760 | ||||
| Average diluted common shares issued and outstanding | 22,803,128 | 23,089,473 | 22,911,637 | 23,076,818 | ||||
| Cash dividends paid per common share | $ 0.10 | $ 0.06 | $ 0.18 | $ 0.12 | ||||
| SUMMARY ENDING BALANCE SHEET | June 30, | |||||||
| 2013 | 2012 | |||||||
| Total loans | $ 2,183,426 | $ 2,037,166 | ||||||
| Total investment securities | 488,925 | 582,813 | ||||||
| Total earning assets | 2,706,213 | 2,667,939 | ||||||
| Total assets | 3,014,166 | 2,979,866 | ||||||
| Total deposits | 2,466,847 | 2,446,063 | ||||||
| Shareholders' equity | 426,329 | 422,034 | ||||||
| OTHER DATA | ||||||||
| End of period full-time equivalent employees | 754 | 772 | ||||||
| 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) Comparison of our efficiency ratio with those of other companies may not be possible, because other companies may calculate the efficiency ratio differently. See Non-GAAP reconciliation for detail. | ||||||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||
| CREDIT QUALITY (UNAUDITED) | ||||||||||
| (Dollars in thousands) | ||||||||||
| CREDIT QUALITY | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||
| Allowance for loan losses: | ||||||||||
| Beginning of period | $ 29,050 | $ 31,615 | $ 29,824 | $ 32,588 | ||||||
| Provision for loan losses | (385) | 1,400 | 315 | 2,250 | ||||||
| Charge-offs | (1,842) | (3,411) | (3,975) | (5,794) | ||||||
| Recoveries | 543 | 538 | 1,202 | 1,098 | ||||||
| Net charge-offs | (1,299) | (2,873) | (2,773) | (4,696) | ||||||
| End of period | $ 27,366 | $ 30,142 | $ 27,366 | $ 30,142 | ||||||
| Accruing Troubled Debt Restructurings | $ 18,463 | $ 24,810 | ||||||||
| Loans greater than 90 days past due still accruing | $ 535 | $ 1,309 | ||||||||
| June 30, | ||||||||||
| 2013 | 2012 | |||||||||
| Non accrual loans | $ 23,987 | $ 30,511 | ||||||||
| Non accrual TDR's | 2,107 | 4,971 | ||||||||
| Total non-performing loans | 26,094 | 35,482 | ||||||||
| Foreclosed assets | 4,095 | 7,014 | ||||||||
| Total non-performing assets | $ 30,189 | $ 42,496 | ||||||||
| Nonperforming assets as a % of total assets | 1.00% | 1.43% | ||||||||
| Nonperforming assets as a % of loans plus foreclosed assets | 1.38% | 2.08% | ||||||||
| Allowance for loan losses as a % of total loans | 1.25% | 1.48% | ||||||||
| Annualized net charge-offs as a % of average loans outstanding - 3 months | 0.24% | 0.56% | ||||||||
| Annualized net charge-offs as a % of average loans outstanding - year to date | 0.26% | 0.46% | ||||||||
| June 30, 2013 | ||||||||||
|
Loans Outstanding |
Nonaccrual Loans |
Nonaccrual Loans to Loans Outstanding |
||||||||
| Construction and land development | $ 225,270 | $ 6,649 | 2.95% | |||||||
| Commercial real estate: | ||||||||||
| Commercial real estate - owner occupied | 368,291 | 1,582 | 0.43% | |||||||
| Commercial real estate - non-owner occupied | 488,409 | 779 | 0.16% | |||||||
| Multifamily, nonresidential, farmland and junior liens | 126,919 | 4,595 | 3.62% | |||||||
| Total commercial real estate | 983,619 | 6,956 | 0.71% | |||||||
| Consumer real estate: | ||||||||||
| Home equity lines | 237,538 | 2,769 | 1.17% | |||||||
| Secured by 1-4 family residential, secured by deeds of trust | 482,173 | 8,763 | 1.82% | |||||||
| Total consumer real estate | 719,711 | 11,532 | 1.60% | |||||||
| Commercial and industrial loans (except those secured by real estate) | 207,840 | 945 | 0.45% | |||||||
| Consumer and other | 46,986 | 12 | 0.03% | |||||||
| Total loans | $ 2,183,426 | $ 26,094 | 1.20% | |||||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||
| BALANCE SHEET (UNAUDITED) | ||||||
| (Dollars in thousands, except per share data) | ||||||
| SELECTED BALANCE SHEET DATA | 6/30/2013 | 6/30/2012 |
Percent Increase (Decrease) |
|||
| Assets | ||||||
| Cash and cash equivalents | $ 51,693 | $ 73,460 | -29.63% | |||
| Investment securities, at fair value | 488,925 | 582,813 | -16.11% | |||
| Mortgage loans held for sale | 28,926 | 20,602 | 40.40% | |||
| Loans: | ||||||
| Construction and land development | 225,270 | 200,811 | 12.18% | |||
| Commercial real estate | 983,619 | 876,693 | 12.20% | |||
| Consumer real estate | 719,711 | 743,061 | -3.14% | |||
| Commercial and industrial loans (except those secured by real estate) | 207,840 | 192,369 | 8.04% | |||
| Consumer and other | 46,986 | 24,232 | 93.90% | |||
| Total loans | 2,183,426 | 2,037,166 | 7.18% | |||
| Deferred loan fees | (437) | (23) | >100% | |||
| Allowance for loan losses | (27,366) | (30,142) | -9.21% | |||
| Net loans | 2,155,623 | 2,007,001 | 7.41% | |||
| Premises and equipment, net | 74,018 | 72,099 | 2.66% | |||
| Core deposit intangibles, net | 3,048 | 4,186 | -27.19% | |||
| Goodwill | 114,167 | 113,652 | 0.45% | |||
| Bank owned life insurance | 45,051 | 43,291 | 4.07% | |||
| Foreclosed assets | 4,095 | 7,014 | -41.62% | |||
| Other assets | 48,620 | 55,748 | -12.79% | |||
| Total assets | 3,014,166 | 2,979,866 | 1.15% | |||
| Liabilities | ||||||
| Deposits: | ||||||
| Noninterest bearing deposits | 379,616 | 347,385 | 9.28% | |||
| Money market & interest checking | 1,097,818 | 1,040,487 | 5.51% | |||
| Savings | 313,429 | 313,018 | 0.13% | |||
| CD's and other time deposits | 675,984 | 745,173 | -9.28% | |||
| Total deposits | 2,466,847 | 2,446,063 | 0.85% | |||
| Federal funds purchased and securities sold under agreements to repurchase | 4,757 | 851 | >100% | |||
| Federal Home Loan Bank advances | 70,000 | 55,000 | 27.27% | |||
| Subordinated debt | 32,991 | 32,991 | 0.00% | |||
| Other liabilities | 13,242 | 22,927 | -42.24% | |||
| Total liabilities | 2,587,837 | 2,557,832 | 1.17% | |||
| Stockholders' equity | ||||||
| Common stock | 22,519 | 22,875 | -1.56% | |||
| Additional paid-in capital | 265,845 | 271,295 | -2.01% | |||
| Retained earnings | 135,206 | 118,552 | 14.05% | |||
| Accumulated other comprehensive income | 2,759 | 9,312 | -70.37% | |||
| Total stockholders' equity | 426,329 | 422,034 | 1.02% | |||
| Total liabilities and stockholders' equity | $ 3,014,166 | $ 2,979,866 | 1.15% | |||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||
| QUARTERLY INCOME STATEMENT (UNAUDITED) | ||||||
| (Dollars in thousands) | ||||||
| Percent | ||||||
| For the three months ended | Increase | |||||
| 6/30/2013 | 6/30/2012 | (Decrease) | ||||
| Interest Income | ||||||
| Loans, including fees | $ 25,349 | $ 25,879 | -2.05% | |||
| Federal funds sold and deposits in other banks | 11 | 31 | -64.52% | |||
| Investment securities: | ||||||
| Taxable | 1,364 | 1,719 | -20.65% | |||
| Tax-exempt | 1,160 | 1,305 | -11.11% | |||
| Total interest income | 27,884 | 28,934 | -3.63% | |||
| Interest Expense | ||||||
| Deposits | 2,850 | 3,996 | -28.68% | |||
| Federal funds purchased and securities sold under agreements to repurchase | 9 | 6 | 50.00% | |||
| Federal Home Loan Bank advances | 411 | 409 | 0.49% | |||
| Subordinated debt | 342 | 343 | -0.29% | |||
| Total interest expense | 3,612 | 4,754 | -24.02% | |||
| Net interest income | 24,272 | 24,180 | 0.38% | |||
| (Recovery of) provision for loan losses | (385) | 1,400 | >100% | |||
| Net interest income after provision for loan losses | 24,657 | 22,780 | 8.24% | |||
| Noninterest Income | ||||||
| Retail banking fees | 3,455 | 3,265 | 5.82% | |||
| Fiduciary and brokerage fee income | 1,389 | 1,182 | 17.51% | |||
| Mortgage banking-related fees | 1,927 | 1,381 | 39.54% | |||
| Losses on mortgage indemnifications and repurchases | (72) | (202) | -64.36% | |||
| (Losses) gains on sale of premises and equipment | (14) | 8 | >100% | |||
| Gains on securities available for sale | -- | 7 | -100.00% | |||
| Losses on sale / impairments of foreclosed assets | (244) | (219) | 11.42% | |||
| Income from bank owned life insurance | 438 | 438 | 0.00% | |||
| Insurance income | 351 | 370 | -5.14% | |||
| Other operating income | 596 | 846 | -29.55% | |||
| Total noninterest income | 7,826 | 7,076 | 10.60% | |||
| Noninterest Expense | ||||||
| Compensation and employee benefits | 11,979 | 12,822 | -6.57% | |||
| Net occupancy | 2,313 | 2,096 | 10.35% | |||
| Equipment | 2,191 | 2,152 | 1.81% | |||
| Amortization-intangible assets | 320 | 413 | -22.52% | |||
| Marketing | 293 | 379 | -22.69% | |||
| State franchise taxes | 588 | 559 | 5.19% | |||
| FDIC insurance | 506 | 543 | -6.81% | |||
| Data processing | 394 | 334 | 17.96% | |||
| Professional fees | 594 | 883 | -32.73% | |||
| Telecommunications | 384 | 410 | -6.34% | |||
| Merger related costs | 871 | -- | -100.00% | |||
| Other operating expenses | 2,819 | 2,616 | 7.76% | |||
| Total noninterest expense | 23,252 | 23,207 | 0.19% | |||
| Income before income taxes | 9,231 | 6,649 | 38.83% | |||
| Income tax expense | 2,914 | 1,768 | 64.82% | |||
| Net income | $ 6,317 | $ 4,881 | 29.42% | |||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||
| YEAR TO DATE INCOME STATEMENT (UNAUDITED) | ||||||
| (Dollars in thousands) | ||||||
| Percent | ||||||
| For the Six Months Ended | Increase | |||||
| 6/30/2013 | 6/30/2012 | (Decrease) | ||||
| Interest Income | ||||||
| Loans, including fees | $ 50,765 | $ 51,893 | -2.17% | |||
| Federal funds sold and deposits in other banks | 30 | 65 | -53.85% | |||
| Investment securities: | ||||||
| Taxable | 2,808 | 3,329 | -15.65% | |||
| Tax-exempt | 2,345 | 2,605 | -9.98% | |||
| Total interest income | 55,948 | 57,892 | -3.36% | |||
| Interest Expense | ||||||
| Deposits | 5,967 | 8,273 | -27.87% | |||
| Federal funds purchased and securities sold under agreements to repurchase | 16 | 13 | 23.08% | |||
| Federal Home Loan Bank advances | 816 | 847 | -3.66% | |||
| Subordinated debt | 678 | 684 | -0.88% | |||
| Total interest expense | 7,477 | 9,817 | -23.84% | |||
| Net interest income | 48,471 | 48,075 | 0.82% | |||
| Provision for loan losses | 315 | 2,250 | -86.00% | |||
| Net interest income after provision for loan losses | 48,156 | 45,825 | 5.09% | |||
| Noninterest Income | ||||||
| Retail banking fees | 6,507 | 6,592 | -1.29% | |||
| Fiduciary and brokerage fee income | 2,617 | 2,410 | 8.59% | |||
| Mortgage banking-related fees | 3,763 | 3,159 | 19.12% | |||
| Losses on mortgage indemnifications and repurchases | (72) | (556) | -87.05% | |||
| Losses on sale of premises and equipment | (24) | (7) | >100% | |||
| Gains on securities available for sale | 6 | 79 | -92.41% | |||
| Losses on sale / impairments of foreclosed assets | (375) | (670) | -44.03% | |||
| Income from bank owned life insurance | 869 | 878 | -1.03% | |||
| Insurance income | 650 | 658 | -1.22% | |||
| Other operating income | 1,324 | 1,502 | -11.85% | |||
| Total noninterest income | 15,265 | 14,045 | 8.69% | |||
| Noninterest Expense | ||||||
| Compensation and employee benefits | 24,402 | 24,924 | -2.09% | |||
| Net occupancy | 4,562 | 4,159 | 9.69% | |||
| Equipment | 4,280 | 4,369 | -2.04% | |||
| Amortization-intangible assets | 631 | 825 | -23.52% | |||
| Marketing | 538 | 628 | -14.33% | |||
| State franchise taxes | 1,175 | 1,128 | 4.17% | |||
| FDIC insurance | 1,013 | 1,182 | -14.30% | |||
| Data processing | 809 | 675 | 19.85% | |||
| Professional fees | 1,348 | 1,565 | -13.87% | |||
| Telecommunications | 757 | 835 | -9.34% | |||
| Merger related costs | 871 | -- | -100.00% | |||
| Other operating expenses | 5,636 | 5,316 | 6.02% | |||
| Total noninterest expense | 46,022 | 45,606 | 0.91% | |||
| Income before income taxes | 17,399 | 14,264 | 21.98% | |||
| Income tax expense | 5,171 | 3,882 | 33.20% | |||
| Net income | $ 12,228 | $ 10,382 | 17.78% | |||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||||
| CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (UNAUDITED) | ||||||||||||
| THREE MONTHS ENDED JUNE 30, 2013 AND 2012 | ||||||||||||
| (Dollars in thousands) | ||||||||||||
| For the Three Months Ended June 30, | ||||||||||||
| 2013 | 2012 | |||||||||||
| Dollars in thousands |
Average Balance |
Interest Inc/Exp |
Average Rates |
Average Balance |
Interest Inc/Exp |
Average Rates |
||||||
| Assets | ||||||||||||
| Loans receivable, net (1) | $ 2,181,889 | $ 25,403 | 4.67% | $ 2,051,477 | $ 25,931 | 5.08% | ||||||
| Investment securities | ||||||||||||
| Taxable | 363,335 | 1,364 | 1.49% | 373,959 | 1,719 | 1.82% | ||||||
| Tax exempt (1) | 124,358 | 1,784 | 5.68% | 137,336 | 2,008 | 5.78% | ||||||
| Total investments | 487,693 | 3,148 | 2.55% | 511,295 | 3,727 | 2.88% | ||||||
| Federal funds sold and deposits in other banks | 14,249 | 11 | 0.33% | 50,506 | 31 | 0.24% | ||||||
| 501,942 | 3,159 | 2.49% | 561,801 | 3,758 | 2.64% | |||||||
| Total earning assets | 2,683,831 | $ 28,562 | 4.27% | 2,613,278 | $ 29,689 | 4.57% | ||||||
| Total nonearning assets | 325,648 | 324,113 | ||||||||||
| Total assets | $ 3,009,479 | $ 2,937,391 | ||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Interest-bearing deposits | ||||||||||||
| Interest checking | $ 624,335 | $ 154 | 0.10% | $ 592,218 | $ 396 | 0.27% | ||||||
| Money market | 459,774 | 391 | 0.34% | 414,588 | 501 | 0.49% | ||||||
| Savings | 315,081 | 76 | 0.10% | 310,126 | 249 | 0.32% | ||||||
| Time deposits: | ||||||||||||
| Less than $100,000 | 455,691 | 1,370 | 1.20% | 495,670 | 1,785 | 1.45% | ||||||
| $100,000 and more | 229,502 | 859 | 1.50% | 255,600 | 1,065 | 1.68% | ||||||
| Total interest-bearing deposits | 2,084,383 | 2,850 | 0.55% | 2,068,202 | 3,996 | 0.78% | ||||||
| Federal funds purchased and securities sold under agreements to repurchase | 4,216 | 9 | 0.84% | 862 | 6 | 2.95% | ||||||
| Federal Home Loan Bank advances | 60,143 | 411 | 2.70% | 55,000 | 409 | 2.94% | ||||||
| Subordinated debt | 32,991 | 342 | 4.10% | 32,991 | 343 | 4.11% | ||||||
| 97,350 | 762 | 3.10% | 88,853 | 758 | 3.38% | |||||||
| Total interest-bearing liabilities | 2,181,733 | 3,612 | 0.66% | 2,157,055 | 4,754 | 0.89% | ||||||
| Total noninterest-bearing liabilities | 401,680 | 359,630 | ||||||||||
| Total liabilities | 2,583,413 | 2,516,685 | ||||||||||
| Stockholders' equity | 426,066 | 420,706 | ||||||||||
| Total liabilities and stockholders' equity | $ 3,009,479 | $ 2,937,391 | ||||||||||
| Net interest income (tax equivalent) | $ 24,950 | $ 24,935 | ||||||||||
| Average interest rate spread | 3.60% | 3.68% | ||||||||||
| Interest expense as percentage of average earning assets | 0.54% | 0.73% | ||||||||||
| Net interest margin | 3.73% | 3.84% | ||||||||||
| (1) Income and yields are reported on a taxable equivalent basis using a 35% tax rate. | ||||||||||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||||
| CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (UNAUDITED) | ||||||||||||
| SIX MONTHS ENDED JUNE 30, 2013 AND 2012 | ||||||||||||
| (Dollars in thousands) | ||||||||||||
| For the Six Months Ended June 30, | ||||||||||||
| 2013 | 2012 | |||||||||||
| Dollars in thousands |
Average Balance |
Interest Inc/Exp |
Average Rates |
Average Balance |
Interest Inc/Exp |
Average Rates |
||||||
| Assets | ||||||||||||
| Loans receivable, net (1) | $ 2,161,974 | $ 50,879 | 4.75% | $ 2,053,153 | $ 51,971 | 5.09% | ||||||
| Investment securities | ||||||||||||
| Taxable | 371,190 | 2,808 | 1.50% | 348,165 | 3,329 | 1.89% | ||||||
| Tax exempt (1) | 125,625 | 3,608 | 5.71% | 138,100 | 4,008 | 5.74% | ||||||
| Total investments | 496,815 | 6,416 | 2.57% | 486,265 | 7,337 | 2.98% | ||||||
| Federal funds sold and deposits in other banks | 18,917 | 30 | 0.32% | 54,914 | 65 | 0.23% | ||||||
| 515,732 | 6,446 | 2.49% | 541,179 | 7,402 | 2.70% | |||||||
| Total earning assets | 2,677,706 | $ 57,325 | 4.32% | 2,594,332 | $ 59,373 | 4.60% | ||||||
| Total nonearning assets | 323,474 | 323,174 | ||||||||||
| Total assets | $ 3,001,180 | $ 2,917,506 | ||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Interest-bearing deposits | ||||||||||||
| Interest checking | $ 625,683 | $ 354 | 0.11% | $ 588,618 | $ 791 | 0.27% | ||||||
| Money market | 461,860 | 875 | 0.38% | 413,664 | 1,045 | 0.51% | ||||||
| Savings | 314,481 | 181 | 0.12% | 303,249 | 581 | 0.39% | ||||||
| Time deposits: | ||||||||||||
| Less than $100,000 | 457,747 | 2,809 | 1.24% | 501,733 | 3,682 | 1.48% | ||||||
| $100,000 and more | 230,193 | 1,748 | 1.53% | 257,482 | 2,174 | 1.70% | ||||||
| Total interest-bearing deposits | 2,089,964 | 5,967 | 0.58% | 2,064,746 | 8,273 | 0.81% | ||||||
| Federal funds purchased and securities sold under agreements to repurchase | 2,809 | 16 | 1.13% | 848 | 13 | 2.95% | ||||||
| Federal Home Loan Bank advances | 57,587 | 816 | 2.82% | 56,181 | 847 | 2.98% | ||||||
| Subordinated debt | 32,991 | 678 | 4.09% | 32,991 | 684 | 4.10% | ||||||
| 93,387 | 1,510 | 3.22% | 90,020 | 1,544 | 3.39% | |||||||
| Total interest-bearing liabilities | 2,183,351 | 7,477 | 0.69% | 2,154,766 | 9,817 | 0.92% | ||||||
| Total noninterest-bearing liabilities | 389,438 | 343,888 | ||||||||||
| Total liabilities | 2,572,789 | 2,498,654 | ||||||||||
| Stockholders' equity | 428,391 | 418,852 | ||||||||||
| Total liabilities and stockholders' equity | $ 3,001,180 | $ 2,917,506 | ||||||||||
| Net interest income (tax equivalent) | $ 49,848 | $ 49,556 | ||||||||||
| Average interest rate spread | 3.63% | 3.68% | ||||||||||
| Interest expense as percentage of average earning assets | 0.56% | 0.76% | ||||||||||
| Net interest margin | 3.75% | 3.84% | ||||||||||
| (1) Income and yields are reported on a taxable equivalent basis using a 35% tax rate. | ||||||||||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||||
| SEGMENT INFORMATION (UNAUDITED) | ||||||||||||
| (Dollars in thousands) | ||||||||||||
| At and for the Three Months Ended June 30, 2013 | ||||||||||||
|
Commercial Bank |
Mortgage Banking |
Wealth Management |
Other |
Intersegment Elimination |
Consolidated | |||||||
| Net interest income | $ 24,121 | $ 493 | $ 1 | $ (343) | $ -- | $ 24,272 | ||||||
| Provision for loan losses | (385) | -- | -- | -- | -- | (385) | ||||||
| Noninterest income | 5,774 | 1,855 | 1,389 | 25 | (1,217) | 7,826 | ||||||
| Noninterest expense | 20,955 | 1,347 | 1,003 | 1,164 | (1,217) | 23,252 | ||||||
| Provision for income taxes | 2,754 | 300 | 116 | (256) | -- | 2,914 | ||||||
| Net income (loss) | $ 6,571 | $ 701 | $ 271 | $ (1,226) | $ -- | $ 6,317 | ||||||
| Total Assets | $ 2,941,931 | $ 63,034 | $ 1,345 | $ 464,102 | $ (456,246) | $ 3,014,166 | ||||||
| Average Assets | $ 2,954,009 | $ 46,052 | $ 987 | $ 467,465 | $ (459,034) | $ 3,009,479 | ||||||
| At and for the Three Months Ended June 30, 2012 | ||||||||||||
|
Commercial Bank |
Mortgage Banking |
Wealth Management |
Other |
Intersegment Elimination |
Consolidated | |||||||
| Net interest income | $ 24,384 | $ 138 | $ -- | $ (342) | $ -- | $ 24,180 | ||||||
| Provision for loan losses | 1,400 | -- | -- | -- | -- | 1,400 | ||||||
| Noninterest income | 6,418 | 1,322 | 1,182 | (583) | (1,263) | 7,076 | ||||||
| Noninterest expense | 22,581 | 1,162 | 1,035 | (308) | (1,263) | 23,207 | ||||||
| Provision for income taxes | 1,856 | 89 | 46 | (223) | -- | 1,768 | ||||||
| Net income (loss) | $ 4,965 | $ 209 | $ 101 | $ (394) | $ -- | $ 4,881 | ||||||
| Total Assets | $ 2,950,582 | $ 20,915 | $ 499 | $ 460,078 | $ (452,208) | $ 2,979,866 | ||||||
| Average Assets | $ 2,913,191 | $ 16,403 | $ 503 | $ 458,529 | $ (451,235) | $ 2,937,391 | ||||||
| At and for the Six Months Ended June 30, 2013 | ||||||||||||
|
Commercial Bank |
Mortgage Banking |
Wealth Management |
Other |
Intersegment Elimination |
Consolidated | |||||||
| Net interest income | $ 48,340 | $ 808 | $ 1 | $ (678) | $ -- | $ 48,471 | ||||||
| Provision for loan losses | 315 | -- | -- | -- | -- | 315 | ||||||
| Noninterest income | 11,359 | 3,672 | 2,617 | 52 | (2,435) | 15,265 | ||||||
| Noninterest expense | 42,615 | 2,792 | 2,038 | 1,012 | (2,435) | 46,022 | ||||||
| Provision for income taxes | 4,807 | 506 | 174 | (316) | -- | 5,171 | ||||||
| Net income (loss) | $ 11,962 | $ 1,182 | $ 406 | $ (1,322) | $ -- | $ 12,228 | ||||||
| Average Assets | $ 2,948,718 | $ 42,951 | $ 840 | $ 469,068 | $ (460,397) | $ 3,001,180 | ||||||
| At and for the Six Months Ended June 30, 2012 | ||||||||||||
|
Commercial Bank |
Mortgage Banking |
Wealth Management |
Other |
Intersegment Elimination |
Consolidated | |||||||
| Net interest income | $ 48,381 | $ 378 | $ -- | $ (684) | $ -- | $ 48,075 | ||||||
| Provision for loan losses | 2,250 | -- | -- | -- | -- | 2,250 | ||||||
| Noninterest income | 12,446 | 2,721 | 2,460 | (1,089) | (2,493) | 14,045 | ||||||
| Noninterest expense | 44,208 | 2,489 | 2,061 | (659) | (2,493) | 45,606 | ||||||
| Provision for income taxes | 3,980 | 183 | 123 | (404) | -- | 3,882 | ||||||
| Net income (loss) | $ 10,389 | $ 427 | $ 276 | $ (710) | $ -- | $ 10,382 | ||||||
| Average Assets | $ 2,889,348 | $ 20,695 | $ 457 | $ 456,669 | $ (449,663) | $ 2,917,506 | ||||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||
| NON-GAAP RECONCILIATION (UNAUDITED) | ||||||||||
| (Dollars in thousands) | ||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||
| June 30, 2013 | March 31, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||
| Noninterest expense | $ 23,252 | $ 22,770 | $ 23,207 | $ 46,022 | $ 45,606 | |||||
| Less: | ||||||||||
| Merger expense | 871 | -- | -- | 871 | -- | |||||
| Amortization of intangible assets | 320 | 311 | 413 | 631 | 825 | |||||
| Adjusted noninterest expense | 22,061 | 22,459 | 22,794 | 44,520 | 44,781 | |||||
| Net interest income (tax equivalent) | 24,950 | 24,897 | 24,935 | 49,848 | 49,556 | |||||
| Noninterest income | 7,826 | 7,439 | 7,076 | 15,265 | 14,045 | |||||
| Less: | ||||||||||
| Gains on sale of securities available for sale | -- | 6 | 7 | 6 | 79 | |||||
| Losses / impairments on foreclosed assets | (244) | (130) | (219) | (375) | (670) | |||||
| Net revenues | $ 33,020 | $ 32,460 | $ 32,223 | $ 65,482 | $ 64,192 | |||||
| Efficiency ratio | 66.81% | 69.19% | 70.74% | 67.99% | 69.76% | |||||
| For the Three Months Ended | For the Six Months Ended | |||||||||
| June 30, 2013 | March 31, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||
| Noninterest income | $ 7,826 | $ 7,439 | $ 7,076 | $ 15,265 | $ 14,045 | |||||
| Less: | ||||||||||
| Gains on securities available for sale | -- | 6 | 7 | 6 | 79 | |||||
| (Losses) gains on sale of premises and equipment | (14) | (10) | 8 | (24) | (7) | |||||
| Operating earnings | $ 7,840 | $ 7,443 | $ 7,061 | $ 15,283 | $ 13,973 | |||||
| For the Three Months Ended | For the Six Months Ended | |||||||||
| June 30, 2013 | March 31, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||
| Net income | $ 6,317 | $ 5,911 | $ 4,881 | $ 12,228 | $ 10,382 | |||||
| Plus: | ||||||||||
| Income tax expense | 2,914 | 2,257 | 1,768 | 5,171 | 3,882 | |||||
| Provision for loan losses | (385) | 700 | 1,400 | 315 | 2,250 | |||||
| Tax equivalent adjustment | 678 | 698 | 755 | 1,377 | 1,481 | |||||
| Pre-tax pre-provision earnings | $ 9,524 | $ 9,566 | $ 8,804 | $ 19,091 | $ 17,995 | |||||
| For the Three Months Ended | ||||||||||
| June 30, 2013 | March 31, 2013 | June 30, 2012 | ||||||||
| Total stockholders' equity | $ 426,329 | $ 428,753 | $ 422,034 | |||||||
| Less: | ||||||||||
| Core deposit intangibles, net | 3,048 | 3,882 | 4,186 | |||||||
| Goodwill | 114,167 | 113,652 | 113,652 | |||||||
| Net other intangibles | 708 | 740 | 984 | |||||||
| Tangible common equity | 308,406 | 310,479 | 303,212 | |||||||
| Total assets | 3,014,166 | 3,013,889 | 2,979,866 | |||||||
| Less: | ||||||||||
| Core deposit intangibles, net | 3,048 | 3,882 | 4,186 | |||||||
| Goodwill | 114,167 | 113,652 | 113,652 | |||||||
| Net other intangibles | 708 | 740 | 984 | |||||||
| Tangible assets | $ 2,896,243 | $ 2,895,615 | $ 2,861,044 | |||||||
| Tangible common equity ratio | 10.65% | 10.72% | 10.60% | |||||||