8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): 04/30/2008

StellarOne Corporation

(Exact name of registrant as specified in its charter)

Commission File Number: 000-22283

VA	541829288
(State or other jurisdiction of	(IRS Employer
incorporation)	Identification No.)

590 Peter Jefferson Parkway, Suite 250

Charlottesville, VA 22911

(Address of principal executive offices, including zip code)

(434) 964-2211

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On April 30, 2008, StellarOne Corporation issued a press release regarding its results of operations and financial condition for the quarter ended March 31, 2008. The text of the press release and the tables provided therewith are included as Exhibits 99.1 and 99.2 to this report.

Item 8.01. Other Events

The Corporation’s Board of Directors has declared a quarterly cash dividend in the amount of $0.16 per share. The dividend is payable on May 26, 2008 to shareholders of record on April 30, 2008. The payment represents an annual yield to shareholders of 3.90% based on the closing price of StellarOne’s stock on April 25, 2008 ($16.25).

Item 9.01. Financial Statements and Exhibits

Exhibit 99.1: Press release

Exhibit 99.2: Press release tables

Signature(s)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		StellarOne Corporation
Date: May 2, 2008	By:	/s/ Jeffrey W. Farrar
		Jeffrey W. Farrar Executive Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
EX-99.1	Press Release
EX-99.2	Press Release Tables

EX-99.1

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE

Contact:

Jeffrey W. Farrar

Executive Vice President and CFO

(434) 964-2217

jfarrar@StellarOneCorp.com

STELLARONE CORPORATION

ANNOUNCES FIRST QUARTER 2008 EARNINGS AND

DIVIDEND

Charlottesville, VA, April 30, 2008 – StellarOne Corporation (NASDAQ: STEL) (StellarOne) today reported first quarter 2008 earnings of $2.1 million, down 48.1% from $4.0 million for the first quarter of 2007. Net income per diluted share was $.14, down 62.2% from $.37 for the same period in 2007. StellarOne’s earnings for the first quarter of 2008 produced an annualized return on average assets (ROA) of .40% and an annualized return on average equity (ROE) of 3.81%, compared to prior year ratios of 1.01% and 10.77%, respectively.

Excluding the net-of-tax effects of nonrecurring merger expenses of $2.4 million associated with the consummation of the merger of equals transaction between Virginia Financial Group, Inc. (VFG) and FNB Corporation (FNB), earnings would have been $4.5 million or $.30 per diluted share, an increase in earnings of $443 thousand or 11.0% and decrease in earnings per share of $.07 or 18.9% over first quarter 2007. ROA and ROE would have been .85% and 8.14%, respectively. StellarOne’s operating results include a full quarter of results for the former VFG, but only the last thirty-three days of the period for the former FNB, representing the period after consummation of the merger from February 28, 2008 to March 31, 2008. Historical 2007 data contained herein reflects only the results of the former VFG prior to merger.

O. R. Barham, Jr., President and CEO, commented, “As anticipated, earnings were impacted by nonrecurring merger expenses associated with the consummation of our merger. The timing of our closing also impacted earnings by limiting the amount of contribution from the former FNB operations for the quarter. Business conditions continue to be challenging, with the Federal Open Market Committee of the Federal Reserve Board of Governors lowering the target Fed Funds rate 200 basis points during the quarter, creating short-term margin compression for StellarOne and most financial institutions in general. The real estate market continues to be soft, although we did not see significant additional deterioration during the first quarter. Business activity continues to be decent in most of our markets. While our combined level of nonperforming assets as compared to prior periods is higher than our historical levels, we have been in a workout situation with most of these credit relationships and real estate owned for the past nine months and we believe that we are making good progress in decisive valuation and resolution of these assets. We are confident in our ability to effectively evaluate the risk within our remaining portfolio and manage our way through this credit cycle.”

Financial Performance

Net Interest Income

Net interest income amounted to $17.5 million for the first quarter of 2008, up $3.2 million or 22.0% compared with $14.4 million for the same quarter in 2007. Growth in average earning assets of $439.2 million or 29.4% associated with the VFG/FNB merger was the primary contributor to this increase. The net interest margin for the first quarter of 2008 was 3.75%, down twenty-three basis points sequentially compared to 3.98% for the fourth quarter of 2007, and down thirty basis points when compared to 4.05% for the first quarter of 2007. Further declines in the targeted Federal funds rate and increases in nonperforming assets continue to negatively impact the net interest margin. Asset yields fell sequentially, with an average yield on assets of 6.46% for the first quarter of 2008, compared to 6.78% for the fourth quarter of 2007 and 6.92% for the first quarter of 2007. Average cost of interest bearing deposits decreased to 3.23% for the first quarter of 2008, as compared to 3.41% for the fourth quarter of 2007 and 3.51% for the first quarter of 2007. Average cost of borrowings, consisting predominately of FHLB advances and commercial paper, amounted to 3.96% for the first quarter of 2008, compared to 3.41% for the fourth quarter of 2007.

Non-Interest Income

Total non-interest income was $5.2 million for the first quarter of 2008, up $1.3 million or 34.9% compared with $3.8 million for the first quarter of 2007 and up $196 thousand or 3.9% sequentially compared with $5.0 million for the fourth quarter of 2007. Retail banking fee income increased $824 thousand or 47.3% to $2.6 million, compared to $1.7 million in the first quarter of 2007. Mortgage banking revenue amounted to $871 thousand, an increase of $272 thousand or 45.4%, as compared to $599 thousand for the first quarter of 2007, and up sequentially $278 thousand or 46.9% from the fourth quarter of 2007. Revenues from trust and brokerage for the first quarter were $1.2 million, up $133 thousand or 12.3% compared to $1.1 million in the first quarter of 2007, and up sequentially $208 thousand or 20.6% from the fourth quarter of 2007. Each of these increase reflect in part the effect of incremental revenues of FNB for a thirty-three day period during the first quarter. Fiduciary and brokerage assets under management were $842 million at March 31, 2008, representing an increase of $247 million or 41.5% from $595 million at December 31, 2007. Loss on sale of foreclosed assets amounted to $500 thousand for the first quarter of 2008, representing the write-down of a residential development to a carrying value of $2.4 million based on comparable sales in the market. This property is now under contract for sale and should close in the second quarter.

Non-interest Expense

Non-interest expense for the first quarter of 2008 amounted to $19.0 million, up $6.8 million or 54.9% from $12.3 million for the same period in 2007, and up sequentially $7.3 million or 62.3% from the fourth quarter of 2007. Excluding the effects of nonrecurring merger expenses of $3.7 million associated with the consummation of the merger of equals transaction between VFG and FNB, non-interest expense for the first quarter of 2008 would have amounted to $15.4 million, up $3.1 million or 25.2% from $12.3 million for the same period in 2007, and up sequentially $3.7 million or 31.1% from the fourth quarter of 2007. These increases reflect the incremental operating costs of FNB for a thirty-three day period during the first quarter of 2008. StellarOne’s efficiency ratio was 80.41% for the quarter, compared to 65.58% for the same quarter in 2007. Excluding the impact of the nonrecurring transaction costs, the efficiency ratio was 66.41% for the quarter.

Balance Sheet

At March 31, 2008, total assets were $3.1 billion, compared to $1.60 billion at March 31, 2007. Shareholder’s equity at March 31, 2008 was $368.6 million, an increase of $215.2 million or greater than 100% compared to March 31, 2007. Shareholder’s equity represented 11.84% of total assets at March 31, 2008, while tangible equity capital represented 9.31% of tangible assets at March 31, 2008. Book value at March 31, 2008 was $16.33 per share, compared to $14.21 at March 31, 2007.

Average loans for the first quarter were $1.63 billion, up $408.9 million or 33.5% from the first quarter of 2007, and up sequentially from $1.21 billion for the fourth quarter of 2007. Average securities were $286.7 million, up $17.0 million or 6.3% from the first quarter of 2007. Average deposits for the first quarter were $1.330 billion, up $285.8 million or 22.0% from the first quarter of 2007. Average borrowings for the first quarter amounted to $154.9 million, an increase of $32.2 million or 26.2% compared to the same period in 2007, and down sequentially $983 thousand or .6% from the fourth quarter of 2007. Average borrowings, consisting predominately of FHLB advances and commercial paper, were $290.4 million, up $135.6 million or 87.5% compared to the first quarter of 2007 and up sequentially $52.2 million or 21.9 % over the fourth quarter of 2007.

Goodwill associated with the merger of equals transaction amounted to $62.0 million, resulting in aggregate goodwill of $75.0 million at March 31, 2008. The core deposit intangible associated with the transaction was $8.6 million, resulting in aggregate core deposit intangibles of $11.7 million at March 31, 2008.

Asset Quality

StellarOne’s ratio of non-performing assets as a percentage of total assets amounted to 1.02% as of March 31, 2008, compared to .17% at March 31, 2007 and .44% at December 31, 2007. This increase is a result of both the addition of nonperforming assets of the former FNB for the first quarter of 2008 and a net increase of $6.8 million in nonperforming assets for the combined company during the quarter. Net charge-offs as a percentage of average loans receivable amounted to .13% for the quarter ended March 31, 2008, compared to .05% for the same period in 2007 and .40% for the quarter ended December 31, 2007. At March 31, 2008, the allowance for loan losses approximates the aggregate balance of non-performing loans, while the allowance as a percentage of total loans amounted to 1.17%. StellarOne recorded a provision for loan losses for the first quarter of $953 thousand compared to net charge-offs of $537 thousand for the period, and compared to a provision of $165 thousand for the three months ended March 31, 2007.

Quarterly Dividend

The Board of Directors of StellarOne Corporation has declared a quarterly dividend of $.16 per share. The dividend is payable on May 26, 2008 to shareholders of record on April 30, 2008. This dividend represents a yield of 3.90% based on the closing price of StellarOne’s stock on April 25, 2008 ($16.25).

About StellarOne

StellarOne Corporation is a traditional community bank, offering a full range of business and consumer banking services, including trust and asset management services, via its trust company affiliate. Through the activities of its affiliates, First National Bank, Planters Bank and Trust Company of Virginia, Second Bank and Trust, and Virginia Commonwealth Trust Company, StellarOne operates 64 full-service branches, 4 loan production offices, and over 80 ATMs serving the New River Valley, Roanoke Valley, Shenandoah Valley, and Central and North Central Virginia.

Non-GAAP Financial Measures

This report refers to the efficiency ratio, which is computed by dividing non-interest expense by the sum of net interest income on a tax equivalent basis and non-interest income excluding gains or losses on securities, fixed assets and foreclosed assets. This is a non-GAAP financial measure that 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. Such information is not in accordance with generally accepted accounting principles in the United States (GAAP) and should not be construed as such. Management believes such financial information is meaningful to the reader in understanding operating performance, but cautions that such information 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.StellarOneCorp.com.

EX-99.2

Exhibit 99.2

QUARTERLY PERFORMANCE SUMMARY

StellarOne Corporation (NASDAQ: STEL)

(Dollars in thousands, except per share data)

	For the Three Months Ended						Percent Increase (Decrease)
	3/31/2008			3/31/2007
INCOME STATEMENT
Interest income - taxable equivalent	$	31,114		$	25,496		22.03	%
Interest expense		13,113			10,592		23.80	%
Net interest income - taxable equivalent		18,001			14,904		20.78	%
Less: taxable equivalent adjustment		486			549		-11.48	%
Net interest income		17,515			14,355		22.01	%
Provision for loan and lease losses		953			165		>100.00	%
Net interest income after provision for loan and lease losses		16,562			14,190		16.72	%
Noninterest income		5,165			3,828		34.93	%
Noninterest expense		19,038			12,287		54.94	%
Provision for income taxes		602			1,713		-64.86	%
Net income	$	2,087		$	4,018		-48.06	%
PER SHARE DATA
Basic earnings	$	0.14		$	0.37		-62.16	%
Diluted earnings	$	0.14		$	0.37		-62.16	%
Shares outstanding		22,577,687			10,791,669
Weighted average shares -
Basic		15,077,544			10,789,966
Diluted		15,156,260			10,820,955
Dividends paid on common shares	$	0.16		$	0.16
PERFORMANCE RATIOS
Return on average assets		0.40	%		1.01	%	-60.40	%
Return on average equity		3.81	%		10.77	%	-64.62	%
Return on average realized equity (A)		3.85	%		10.72	%	-64.09	%
Net interest margin (taxable equivalent)		3.75	%		4.05	%	-7.41	%
Efficiency (taxable equivalent) (B)		80.41	%		65.58	%	22.61	%
ASSET QUALITY
Allowance for loan losses
Beginning of period	$	15,082		$	14,500
Provision for loan losses		953			165
Charge offs		(618	)		(211	)
Recoveries		81			47
Net charge-offs		(537	)		(164	)
Allowance acquired via acquisition		11,539
End of period	$	27,037		$	14,501
Non-performing assets:
Non-accrual loans	$	24,959		$	2,709
Loans 90+ days past due and still accruing		327			-
Foreclosed assets		5,617			38
Troubled debt restructurings		789			-
Total non-performing assets	$	31,692		$	2,747
to total assets:		1.02	%		0.17	%
to total loans plus foreclosed assets:		1.37	%		0.23	%
Allowance for loan losses to total loans		1.17	%		1.19	%
Net charge-offs (recoveries)	$	537		$	164
Net charge-offs to average loans outstanding		0.13	%		0.05	%

NOTES:

(A) Excludes the effect on average stockholders’ equity of unrealized gains (losses) that result from changes in market values of securities and other comprehensive pension expense.

(B) Computed by dividing non-interest expense by the sum of net interest income and non- interest income, net of gains or losses on securities, fixed assets and foreclosed assets. This is a non-GAAP financial measure, which we believe provides investors with important information regarding our operational efficiency. Comparison of our efficiency ratio with those of other companies may not be possible, because other companies may calculate the efficiency ratio differently.

(C) Individual amounts shown above are calculated from actual, not rounded amounts in the thousands, which appear above.

QUARTERLY PERFORMANCE SUMMARY

StellarOne Corporation (NASDAQ: STEL)

(Dollars in thousands, except per share data)

							Percent Increase (Decrease)
	3/31/2008			3/31/2007
SELECTED BALANCE SHEET DATA
(Dollars in thousands)
End of period balances
Cash and cash equivalents	$	121,198		$	36,749		>100.00	%
Securities available for sale		417,022			256,578		62.53	%
Securities held to maturity		3,594			3,331		7.90	%
Total securities		420,616			259,909		61.83	%
Real estate - construction		392,546			225,350		74.19	%
Real estate - 1-4 family residential		732,319			313,012		133.96	%
Real estate - commercial and multifamily		850,530			528,702		60.87	%
Commercial, financial and agricultural		230,783			112,455		105.22	%
Consumer loans		83,386			31,176		167.47	%
All other loans		20,759			6,305		229.25	%
Total loans		2,310,323			1,217,000		89.84	%
Deferred loan costs		46			935		-95.08	%
Allowance for loan losses		(27,037	)		(14,501	)	86.45	%
Net loans		2,283,332			1,203,434		89.73	%
Core deposit intangibles, net		11,673			3,707		>100.00	%
Goodwill		75,041			13,896		>100.00	%
Bank owned life insurance		27,882			10,350		>100.00	%
Other assets		173,548			73,108		>100.00	%
Total assets		3,113,290			1,601,153		94.44	%
Noninterest bearing deposits		337,354			240,649		40.19	%
Money market & interest checking		655,297			320,953		>100.00	%
Savings		215,475			96,479		>100.00	%
CD’s and other time deposits		1,160,341			619,674		87.25	%
Total deposits		2,368,467			1,277,755		85.36	%
Federal funds purchased and securities sold under agreements to repurchase		1,136			18,000		-93.69	%
Federal Home Loan Bank advances		240,958			55,000		>100.00	%
Subordinated debt		32,991			20,619		60.00	%
Commercial paper		74,309			63,788		16.49	%
Other borrowed funds		350			493		-29.01	%
Other liabilities		26,492			12,115		>100.00	%
Total liabilities		2,744,703			1,447,770		89.58	%
Total stockholders’ equity	$	368,587		$	153,383		>100.00	%
Accumulated comprehensive loss	$	1,869		$	(686	)	>(100.00	%)
Average balances
	For the Three Months Ended						Percent Increase (Decrease)
	3/31/2008			3/31/2007
Total assets	$	2,100,220		$	1,606,052		30.77	%
Total stockholders’ equity	$	220,319		$	151,311		45.61	%
OTHER DATA
End of period full time employees		908			578

QUARTERLY PERFORMANCE SUMMARY

StellarOne Corporation (NASDAQ: STEL)

(Dollars in thousands)

	For the Three Months Ended					Percent Increase (Decrease)
	3/31/2008			3/31/2007
Interest Income
Loans, including fees	$	27,262		$	21,985	24.00	%
Deposits in other banks		3			6	-50.00	%
Investment securities:
Taxable		2,062			1,834	12.43	%
Tax-exempt		837			943	-11.24	%
Dividends		268			126	>100.00	%
Federal funds sold		196			53	>100.00	%
Total interest income		30,628			24,947	22.77	%
Interest Expense
Deposits		10,205			8,531	19.62	%
Federal funds repurchased and securities sold under agreements to repurchase		55			108	-49.07	%
Federal Home Loan Bank advances		1,907			777	>100.00	%
Subordinated debt		467			417	11.99	%
Commercial paper		479			754	-36.47	%
Other borrowings		—			5	-100.00	%
Total interest expense		13,113			10,592	23.80	%
Net interest income		17,515			14,355	22.01	%
Provision for loan losses		953			165	>100.00	%
Net interest income after provision for loan losses		16,562			14,190	16.72	%
Noninterest Income
Retail banking fees		2,567			1,743	47.27	%
Commissions and fees from fiduciary activities		803			828	-3.02	%
Brokerage fee income		414			256	61.72	%
Other operating income		978			402	>100.00	%
Gains on securities available for sale		32			—	N/A
Losses on sales of foreclosed assets		(500	)		—	N/A
Mortgage banking-related fees		871			599	45.41	%
Total noninterest income		5,165			3,828	34.93	%
Noninterest Expense
Compensation and employee benefits		11,168			6,819	63.78	%
Net occupancy		1,160			874	32.72	%
Supplies and equipment		1,541			1,121	37.47	%
Amortization-intangible assets		161			164	-1.83	%
Marketing		417			249	67.47	%
State franchise taxes		395			244	61.89	%
Data processing		1,084			468	>100.00	%
Telecommunications		289			238	21.43	%
Professional fees		574			150	>100.00	%
Other operating expenses		2,249			1,960	14.74	%
Total noninterest expense		19,038			12,287	54.94	%
Income before income taxes		2,689			5,731	-53.08	%
Income tax expense		602			1,713	-64.86	%
Net income	$	2,087		$	4,018	-48.06	%

STELLARONE CORPORATION

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES

THREE MONTHS ENDED MARCH 31, 2008 AND 2007

(Dollars in thousands)

	Three months ended March 31,
	2008						2007
	Average		Interest		Average		Average		Interest		Average
Dollars in thousands	Balance		Inc/Exp		Rates		Balance		Inc/Exp		Rates
Assets
Loans receivable, net	$	1,627,999	$	27,300	6.73	%	$	1,219,094	$	22,026	7.33	%
Investment securities
Taxable		202,373		2,341	4.58	%		174,839		1,960	4.48	%
Tax exempt		84,337		1,287	6.04	%		94,854		1,451	6.12	%
Total investments		286,710		3,628	5.01	%		269,693		3,411	5.05	%
Interest bearing deposits		375		3	3.16	%		626		6	3.83	%
Federal funds sold		17,396		183	4.16	%		3,831		53	5.53	%
		304,481		3,814	4.96	%		274,150		3,470	5.05	%
Total earning assets		1,932,480		31,114	6.46	%		1,493,244		25,496	6.92	%
				31,114
Total nonearning assets		167,740						112,808
Total assets	$	2,100,220					$	1,606,052
Liabilities and Stockholders’ Equity
Interest-bearing deposits
Interest checking	$	305,030	$	1,096	1.44	%	$	159,417	$	63	0.16	%
Money market		131,175		665	2.03	%		179,678		1,256	2.83	%
Savings		127,065		338	1.07	%		96,518		302	1.27	%
Time deposits:
Less than $100,000		513,723		5,298	4.14	%		414,884		4,435	4.34	%
$100,000 and more		255,407		2,808	4.41	%		213,672		2,475	4.70	%
Total interest-bearing deposits		1,332,400		10,205	3.07	%		1,064,169		8,531	3.25	%
Federal funds purchased and securities sold under agreements to repurchase		5,444		54	3.92	%		7,883		108	5.48	%
Federal Home Loan Bank advances		185,516		1,908	4.07	%		62,205		777	5.00	%
Subordinated debt		24,426		463	7.50	%		20,619		417	8.09	%
Commercial paper		74,261		479	2.55	%		63,805		754	4.73	%
Other borrowings		782		4	2.02	%		345		5	5.80	%
		290,429		2,908	3.96	%		154,857		2,061	5.32	%
Total interest-bearing liabilities		1,622,829		13,113	3.23	%		1,219,026		10,592	3.51	%
Total noninterest-bearing liabilities		257,072						235,715
Total liabilities		1,876,094						1,454,741
Stockholders’ equity		220,319						151,311
Total liabilities and stockholders’ equity	$	2,100,220					$	1,606,052
Net interest income (tax equivalent)			$	18,001					$	14,904
Average interest rate spread					3.23	%					3.41	%
Interest expense as percentage of average earning assets					2.71	%					2.88	%
Net interest margin					3.75	%					4.05	%