Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact:
Jeffrey W. Farrar
Executive Vice President and CFO
(434) 964-2217
jfarrar@stellarone.com
STELLARONE CORPORATION
ANNOUNCES EARNINGS OF $6.1 MILLION FOR SECOND QUARTER 2008
Charlottesville, VA, July 29, 2008 – StellarOne Corporation (NASDAQ: STEL) (StellarOne) today reported second quarter 2008 earnings of $6.1 million, up 35.2% from $4.5 million for the second quarter of 2007, and up sequentially greater than 100% from $2.1 million in the first quarter of 2008. Net income per diluted share was $.27, down 35.7% from $.42 per share for the same period in 2007. StellarOne’s earnings for the second quarter of 2008 produced an annualized return on average assets (ROA) of .81% and an annualized return on average equity (ROE) of 6.72%, compared to prior year ratios of 1.15% and 11.82%, respectively. For the first six months of 2008, net income was $8.2 million, down 3.9% from $8.6 million for the same period in 2007. Net income per diluted share was $.44, down 44.3% from $.79 for the first six months of 2007. ROA and ROE for the six month period was .64% and 5.63%, respectively, compared to 1.08% and 11.31% for the same period in 2007. StellarOne’s year to date operating results include the former Virginia Financial Group, Inc. (VFG) for the entire period, but results from the former FNB Corporation (FNB) are only included from February 28, 2008 forward, representing the period subsequent to consummation of the merger of equals transaction between VFG and FNB. This will impact all comparisons to first quarter 2008 contained herein. Historical 2007 data contained herein reflects only the results of the former VFG prior to merger.
Excluding net-of-tax effects of both the nonrecurring merger expenses of $929 thousand and increase in revenues from the amortization of purchase accounting adjustments of $2.4 million associated with the consummation of the merger, earnings for the second quarter would have been $4.6 million or $.21 per diluted share, an increase in earnings of $104 thousand or 2.3% and decrease in earnings per share of $.21 or 50.0% compared to the second quarter of 2007. ROA and ROE would have been .61% and 5.09%, respectively. Excluding, net-of-tax effects of both the nonrecurring merger expenses of $3.3 million and the net increase in income from the amortization of purchase accounting adjustments of $2.4 million associated with the consummation of the merger, earnings for the six month period would have been $9.1 million or $.48 per diluted share, an increase in earnings of $879 thousand or 10.7% and decrease in earnings per share of $.31 or 39.2% compared to the first six months of 2007. ROA and ROE would have been .71% and 6.23%, respectively.
O. R. Barham, Jr., President and CEO, commented, “We had many accomplishments during the second quarter, and are about where we thought we would be from an earnings standpoint in the face of continuing weakness in the economy, real estate markets and turmoil in the banking sector. While we are encouraged by the improvement in our levels of non-performing assets as compared to last quarter, it is tempered by the fact that business activity continues to slow. This contributed to several credit downgrades during the quarter, necessitating an increase in provisioning for loan losses. We will continue to be vigilant in our monitoring and provisioning of our loan portfolio throughout the remaining part of this year. StellarOne’s strong capital levels will help us weather this economic downturn. Once economic conditions improve, this same strong capital position will allow us to further grow our franchise.”
“As anticipated, earnings continued to be impacted by nonrecurring integration expenses associated with putting our affiliate banks together. It has been roughly eight weeks since we completed our merger creating Virginia’s largest commercial based bank. We are encouraged by our initial retention rates and appreciate the loyalty of our customer base. StellarOne now serves over 84,000 households through 64 branches and 80 ATM machines. We have been included in the Russell 3000 index; have approximately 8,500 shareholders and now trade over 74,000 shares (3 month average) of stock a day. We also now possess the fifth largest deposit share in the state of Virginia. We have created a great company with an even greater future, and will continue to manage through a difficult environment and prepare the Company to capitalize on improved market conditions.”
Financial Performance
Net Interest Income
Net interest income amounted to $29.3 million for the second quarter of 2008, up $14.4 million or 96.7% compared with $14.9 million for the same quarter in 2007. Growth in average earning assets of $1.3 billion or 87.6% over 2007 associated with the VFG/FNB merger was the primary contributor to this increase. The net interest margin for the second quarter of 2008 was 4.37%, up sixty-two basis points sequentially compared to 3.75% for the first quarter of 2008, and up fifteen basis points when compared to 4.22% for the second quarter of 2007. Margin for the quarter was positively impacted by the loan discount, CD premium and a borrowing premium associated with the VFG/FNB merger, all of which began amortizing during the quarter. These premiums and discounts stem from adjusting assets and liabilities to their respective market values as part of the purchase adjustments associated with the merger. Margin adjusted for the purchase accounting items for the quarter and six month period amounted to 3.75% and 3.74%, respectively. Core margin is expected to experience modest compression as the rate of improvement in cost of funds slows, the level of loan growth continues to be impacted by market conditions, and the positive effects of amortizing the purchase adjustments lessen. Other factors that could change this result include the level of non-performing assets and the direction of short term rates for the remainder of the year.
Asset yields rose sequentially, with an average yield on assets of 6.51% for the second quarter of 2008, compared to 6.46% for the first quarter of 2008 and decreased forty-eight basis points when compared to 6.99% for the second quarter of 2007. Average cost of interest bearing liabilities decreased to 2.53% for the second quarter of 2008, as compared to 3.23% for the first quarter of 2008 and 3.43% for the second quarter of 2007. This decrease in funding costs during the quarter was predominantly the result of reductions in interest expense of $1.8 million and $758 thousand, which related to the amortization of premiums on CD’s and FHLB advances, respectively, that were adjusted to market value as part of the merger. Additionally, funding costs were also reduced due to recent actions taken by the Fed and an increased level of CD maturities repricing during the quarter. For the six months ended June 30, 2008, net interest income was $46.8 million, an increase of $17.5 million or 60.1% from $29.3 million for the same period in 2007. The net interest margin for the six month period ended June 30, 2008 was 4.08%, compared to 4.14% for the same period in 2007. The amortization of the purchase adjustments affected the margin for the six month period to a lesser degree than the quarter, but still helped to offset compression related to the decline in the targeted Federal funds rate and increases in nonperforming assets when compared to June 30, 2007.
Non-Interest Income
Total non-interest income was $7.6 million for the second quarter of 2008, up $3.3 million or 76.4% compared with $4.3 million for the second quarter of 2007 and up $2.4 million or 48.1% sequentially compared with $5.2 million for the first quarter of 2008. Retail banking fee income increased $2.0 million or greater than 100% to $3.9 million, compared to $1.9 million in the second quarter of 2007. Mortgage banking revenue amounted to $1.4 million, an increase of $712 thousand or greater than 100%, as compared to $645 thousand for the second quarter of 2007, and up sequentially $486 thousand or 55.8% from the first quarter of 2008. Revenues from trust and brokerage for the second quarter were $1.4 million, up $238 thousand or 20.7% compared to $1.2 million in the second quarter of 2007, and up sequentially $172 thousand or 14.1% from the first quarter of 2008. Losses on the sale of foreclosed assets amounted to $260 thousand for the second quarter of 2008, the majority of which related to the sale of a residential development property foreclosed on during the first quarter.
Non-interest Expense
Non-interest expense for the second quarter of 2008 amounted to $24.6 million, up $11.7 million or 91.5% from $12.9 million for the same period in 2007, and up sequentially $5.6 million or 29.3% from the first quarter of 2008. StellarOne’s efficiency ratio was 65.26% for the quarter, compared to 64.85% for the same quarter in 2007. For the six month period ended June 30, 2008, the efficiency ratio was 71.51%, compared to 65.21% for the same period in 2007. Excluding the impact of nonrecurring revenue and expense items noted above, the efficiency ratio was 67.29% and 66.74% for the quarter and six month period ended June 30, 2008, respectively. Excluding the effects of nonrecurring merger expenses of $5.1 million associated with the consummation of the merger of equals transaction between VFG and FNB, non-interest expense for the first six months of 2008 would have amounted to $38.6 million, up $13.4 million or 53.4% from $25.1 million for the same period in 2007. Noninterest expense for the quarter was affected in the same manner as the six month period by the related increases in incremental costs and nonrecurring merger expenses.
Balance Sheet
At June 30, 2008, total assets were $3.03 billion, compared to $1.60 billion at June 30, 2007. Shareholder’s equity at June 30, 2008 was $366.5 million, an increase of $211.5 million or greater than 100% compared to June 30, 2007. Shareholder’s equity represented 12.09% of total assets at June 30, 2008, while tangible equity capital represented 9.57% of tangible assets at June 30, 2008. Book value at June 30, 2008 was $16.22 per share, compared to $14.36 at June 30, 2007.
Average loans for the second quarter were $2.29 billion, up $1.08 billion or 89.3% from the second quarter of 2007, and up sequentially from $1.63 billion for the first quarter of 2008. Average securities were $403.2 million, up $145.1 million or 87.3% from the second quarter of 2007. Average deposits for the second quarter were $2.37 billion, up $800.8 million or 50.9% from the first quarter of 2008. Average borrowings, consisting predominately of FHLB advances and commercial paper for the second quarter amounted to $301.5 million, an increase of $128.6 million or 74.3% compared to the same period in 2007, and up sequentially $11 thousand or 3.8% from the first quarter of 2008.
Goodwill associated with the merger of equals transaction amounted to $59.5 million, resulting in aggregate goodwill of $73.4 million at June 30, 2008. The core deposit intangible associated with the transaction was $8.6 million, resulting in aggregate core deposit intangibles of $11.3 million at June 30, 2008.
Asset Quality
StellarOne’s ratio of non-performing assets as a percentage of total assets amounted to .86% as of June 30, 2008, compared to .20% at June 30, 2007 and 1.02 % at March 31, 2008. The increase compared to the same period in the prior year is a result of declining market conditions in general. The net decrease of $5.8 million on a linked quarter basis relates to significant reductions in nonaccrual loans and the sale of foreclosed assets during the quarter. Net charge-offs as a percentage of average loans receivable amounted to .22% for the quarter ended June 30, 2008, compared to none for the same period in 2007 and .13% for the quarter ended March 31, 2008. At June 30, 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 1.25%. StellarOne recorded a provision for loan losses for the second quarter of $2.8 million compared to net charge-offs of $1.3 million for the period, which compares to no provision and $34 thousand in net recoveries for the three months ended June 30, 2007. The increased levels of provisioning reflect actions taken to address the continuing deterioration of credit quality in a small number of larger real estate construction credits and weakened real estate conditions in a few of the market’s served. However, the Company remains well diversified in both the types of loans within the portfolio and markets served throughout the Commonwealth.
Quarterly Dividend
The Board of Directors of StellarOne Corporation has declared a quarterly dividend of $.16 per share, payable on August 25, 2008 to shareholders of record on August 4, 2008. This dividend represents a yield of 3.71% based on the closing price of StellarOne’s stock on July 25, 2008 ($17.25).
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 division. Through the activities of its sole affiliate, StellarOne Bank, StellarOne operates 64 full-service financial centers, 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. Such information is not in accordance with generally accepted accounting principles in the United States (GAAP) and should not be construed as such. 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. 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.stellarone.com.
QUARTERLY PERFORMANCE SUMMARY
StellarOne Corporation (NASDAQ: STEL)
(Dollars in thousands, except per share data)
Percent | |||||||||||
For the Three Months Ended | Increase | ||||||||||
6/30/2008 | 6/30/2007 | (Decrease) | |||||||||
INCOME STATEMENT |
|||||||||||
Interest income - taxable equivalent |
$ | 44,709 | $ | 25,604 | 74.62 | % | |||||
Interest expense |
14,720 | 10,151 | 45.01 | % | |||||||
Net interest income - taxable equivalent |
29,989 | 15,453 | 94.07 | % | |||||||
Less: taxable equivalent adjustment |
656 | 538 | 21.93 | % | |||||||
Net interest income |
29,333 | 14,915 | 96.67 | % | |||||||
Provision for loan and lease losses |
2,835 | — | N/A | ||||||||
Net interest income after provision for loan and lease losses |
26,498 | 14,915 | 77.66 | % | |||||||
Noninterest income |
7,647 | 4,336 | 76.36 | % | |||||||
Noninterest expense |
24,609 | 12,854 | 91.45 | % | |||||||
Provision for income taxes |
3,396 | 1,856 | 82.97 | % | |||||||
Net income |
$ | 6,140 | $ | 4,541 | 35.21 | % | |||||
PER SHARE DATA |
|||||||||||
Basic earnings |
$ | 0.27 | $ | 0.42 | -35.71 | % | |||||
Diluted earnings |
$ | 0.27 | $ | 0.42 | -35.71 | % | |||||
Shares outstanding |
22,600,357 | 10,792,797 | |||||||||
Weighted average shares - |
|||||||||||
Basic |
22,585,161 | 10,792,467 | |||||||||
Diluted |
22,651,991 | 10,817,882 | |||||||||
Dividends paid on common shares |
$ | 0.16 | $ | 0.16 | |||||||
PERFORMANCE RATIOS |
|||||||||||
Return on average assets |
0.81 | % | 1.15 | % | -29.57 | % | |||||
Return on average equity |
6.72 | % | 11.82 | % | -43.15 | % | |||||
Return on average realized equity (A) |
6.72 | % | 11.76 | % | -42.86 | % | |||||
Net interest margin (taxable equivalent) |
4.37 | % | 4.22 | % | 3.54 | % | |||||
Efficiency (taxable equivalent) (B) |
65.26 | % | 64.85 | % | 0.63 | % | |||||
ASSET QUALITY |
|||||||||||
Allowance for loan losses |
|||||||||||
Beginning of period |
$ | 27,037 | $ | 14,501 | |||||||
Provision for loan losses |
2,835 | — | |||||||||
Charge offs |
(1,908 | ) | (34 | ) | |||||||
Recoveries |
651 | 28 | |||||||||
Net charge-offs |
(1,257 | ) | (6 | ) | |||||||
End of period |
$ | 28,615 | 14,495 | ||||||||
Non-performing assets: |
|||||||||||
Non-accrual loans |
$ | 22,392 | $ | 3,139 | |||||||
Loans 90+ days past due and still accruing |
465 | — | |||||||||
Foreclosed assets |
2,260 | — | |||||||||
Troubled debt restructurings |
814 | — | |||||||||
Total non-performing assets |
$ | 25,931 | $ | 3,139 | |||||||
to total assets: |
0.86 | % | 0.20 | % | |||||||
to total loans plus foreclosed assets: |
1.13 | % | 0.26 | % | |||||||
Allowance for loan losses to total loans |
1.25 | % | 1.21 | % | |||||||
Net charge-offs |
$ | 1,257 | $ | 6 | |||||||
Net charge-offs to average loans outstanding |
0.22 | % | 0.00 | % |
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 | |||||||||||
For the Six Months Ended | Increase | ||||||||||
6/30/2008 | 6/30/2007 | (Decrease) | |||||||||
INCOME STATEMENT |
|||||||||||
Interest income - taxable equivalent |
$ | 75,469 | $ | 51,099 | 47.69 | % | |||||
Interest expense |
27,832 | 20,742 | 34.18 | % | |||||||
Net interest income - taxable equivalent |
47,637 | 30,357 | 56.92 | % | |||||||
Less: taxable equivalent adjustment |
790 | 1,087 | -27.32 | % | |||||||
Net interest income |
46,847 | 29,270 | 60.05 | % | |||||||
Provision for loan and lease losses |
3,787 | 165 | >100.00 | % | |||||||
Net interest income after provision for loan and lease losses |
43,060 | 29,105 | 47.95 | % | |||||||
Noninterest income |
12,812 | 8,164 | 56.93 | % | |||||||
Noninterest expense |
43,647 | 25,141 | 73.61 | % | |||||||
Provision for income taxes |
3,998 | 3,568 | 12.05 | % | |||||||
Net income |
$ | 8,227 | $ | 8,560 | -3.89 | % | |||||
PER SHARE DATA |
|||||||||||
Basic earnings |
$ | 0.44 | $ | 0.79 | -44.30 | % | |||||
Diluted earnings |
$ | 0.44 | $ | 0.79 | -44.30 | % | |||||
Shares outstanding |
22,600,357 | 10,792,797 | |||||||||
Weighted average shares - |
|||||||||||
Basic |
18,831,352 | 10,791,224 | |||||||||
Diluted |
18,899,355 | 10,819,352 | |||||||||
Dividends paid on common shares |
$ | 0.32 | $ | 0.32 | |||||||
PERFORMANCE RATIOS |
|||||||||||
Return on average assets |
0.64 | % | 1.08 | % | -40.74 | % | |||||
Return on average equity |
5.63 | % | 11.31 | % | -50.22 | % | |||||
Return on average realized equity (A) |
5.65 | % | 11.25 | % | -49.78 | % | |||||
Net interest margin (taxable equivalent) |
4.08 | % | 4.14 | % | -93.75 | % | |||||
Efficiency (taxable equivalent) (B) |
71.51 | % | 65.21 | % | 9.66 | % | |||||
ASSET QUALITY |
|||||||||||
Allowance for loan losses |
|||||||||||
Beginning of period |
$ | 15,082 | $ | 14,500 | |||||||
Provision for loan losses |
3,787 | 165 | |||||||||
Charge-offs |
(2,526 | ) | (245 | ) | |||||||
Recoveries |
733 | 75 | |||||||||
Net (charge-offs) recoveries |
(1,793 | ) | (170 | ) | |||||||
Allowance acquired via acquisition |
11,539 | — | |||||||||
End of period |
$ | 28,615 | $ | 14,495 | |||||||
Allowance for loan losses to total loans |
1.25 | % | 1.21 | % | |||||||
Net charge-offs |
$ | 1,793 | $ | 170 | |||||||
Net charge-offs to average loans outstanding |
0.18 | % | 0.03 | % |
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 | |||||||||||
SELECTED BALANCE SHEET DATA | Increase | ||||||||||
(Dollars in thousands) |
6/30/2008 | 6/30/2007 | (Decrease) | ||||||||
End of period balances |
|||||||||||
Cash and cash equivalents |
$ | 136,360 | $ | 41,451 | >100.00 | % | |||||
Securities available for sale |
348,716 | 251,307 | 38.76 | % | |||||||
Securities held to maturity |
929 | 2,653 | -64.98 | % | |||||||
Total securities |
349,645 | 253,960 | 37.68 | % | |||||||
Real estate - construction |
385,290 | 215,142 | 79.09 | % | |||||||
Real estate - 1-4 family residential |
738,049 | 317,879 | >100.00 | % | |||||||
Real estate - commercial and multifamily |
849,978 | 524,527 | 62.05 | % | |||||||
Commercial, financial and agricultural |
231,377 | 100,441 | >100.00 | % | |||||||
Consumer loans |
71,823 | 29,580 | >100.00 | % | |||||||
All other loans |
13,716 | 6,266 | >100.00 | % | |||||||
Total loans |
2,290,233 | 1,193,835 | 91.84 | % | |||||||
Deferred loan costs |
841 | 1,012 | -16.90 | % | |||||||
Allowance for loan losses |
(28,615 | ) | (14,495 | ) | 97.41 | % | |||||
Net loans |
2,262,459 | 1,180,352 | 91.68 | % | |||||||
Core deposit intangibles, net |
11,142 | 3,546 | >100.00 | % | |||||||
Goodwill |
73,386 | 13,896 | >100.00 | % | |||||||
Bank owned life insurance |
28,208 | 10,471 | >100.00 | % | |||||||
Other assets |
169,495 | 79,953 | >100.00 | % | |||||||
Total assets |
3,030,695 | 1,583,629 | 91.38 | % | |||||||
Noninterest bearing deposits |
346,861 | 233,110 | 48.80 | % | |||||||
Money market & interest checking |
747,711 | 315,840 | >100.00 | % | |||||||
Savings |
208,039 | 91,553 | >100.00 | % | |||||||
CD’s and other time deposits |
1,112,137 | 595,839 | 86.65 | % | |||||||
Total deposits |
2,414,748 | 1,236,342 | 95.31 | % | |||||||
Federal funds purchased and securities sold under agreements to repurchase |
1,746 | — | N/A | ||||||||
Federal Home Loan Bank advances |
195,733 | 85,500 | >100.00 | % | |||||||
Subordinated debt |
32,991 | 20,619 | 60.00 | % | |||||||
Commercial paper |
— | 73,724 | -100.00 | % | |||||||
Other borrowed funds |
59 | 873 | -93.24 | % | |||||||
Other liabilities |
18,874 | 11,555 | 63.34 | % | |||||||
Total liabilities |
2,664,151 | 1,428,613 | 86.49 | % | |||||||
Total stockholders’ equity |
$ | 366,544 | $ | 155,016 | >100.00 | % | |||||
Accumulated comprehensive loss |
$ | (1,179 | ) | $ | (1,972 | ) | -40.21 | % | |||
Average balances |
|||||||||||
For the Three Months Ended | Percent Increase |
||||||||||
6/30/2008 | 6/30/2007 | (Decrease) | |||||||||
Total assets |
$ | 3,049,826 | $ | 1,582,575 | 92.71 | % | |||||
Total stockholders’ equity |
$ | 367,327 | $ | 154,045 | >100.00 | % | |||||
For the Six Months Ended | |||||||||||
6/30/2008 | 6/30/2007 | ||||||||||
Total assets |
$ | 2,579,607 | $ | 1,595,169 | 61.71 | % | |||||
Total stockholders’ equity |
$ | 293,823 | $ | 152,685 | 92.44 | % | |||||
OTHER DATA |
|||||||||||
End of period full time employees |
901 | 536 |
QUARTERLY PERFORMANCE SUMMARY
StellarOne Corporation (NASDAQ: STEL)
(Dollars in thousands)
Percent | |||||||||||
For the Three Months Ended | Increase | ||||||||||
6/30/2008 | 6/30/2007 | (Decrease) | |||||||||
Interest Income |
|||||||||||
Loans, including fees |
$ | 39,208 | $ | 22,278 | 75.99 | % | |||||
Deposits in other banks |
9 | 4 | >100.00 | % | |||||||
Investment securities: |
|||||||||||
Taxable |
3,147 | 1,715 | 83.50 | % | |||||||
Tax-exempt |
995 | 926 | 7.45 | % | |||||||
Dividends |
339 | 134 | >100.00 | % | |||||||
Federal funds sold |
354 | 9 | >100.00 | % | |||||||
Total interest income |
44,052 | 25,066 | 75.74 | % | |||||||
Interest Expense |
|||||||||||
Deposits |
12,458 | 7,843 | 58.84 | % | |||||||
Federal funds repurchased and securities sold under agreements to repurchase |
5 | 117 | -95.73 | % | |||||||
Federal Home Loan Bank advances |
1,631 | 969 | 68.32 | % | |||||||
Subordinated debt |
466 | 421 | 10.69 | % | |||||||
Commercial paper |
156 | 791 | -80.28 | % | |||||||
Other borrowings |
3 | 10 | -70.00 | % | |||||||
Total interest expense |
14,719 | 10,151 | 45.00 | % | |||||||
Net interest income |
29,333 | 14,915 | 96.67 | % | |||||||
Provision for loan losses |
2,835 | — | N/A | ||||||||
Net interest income after provision for loan losses |
26,498 | 14,915 | 77.66 | % | |||||||
Noninterest Income |
|||||||||||
Retail banking fees |
3,896 | 1,920 | >100.00 | % | |||||||
Commissions and fees from fiduciary activities |
1,071 | 857 | 24.97 | % | |||||||
Brokerage fee income |
318 | 294 | 8.16 | % | |||||||
Other operating income |
1,080 | 652 | 65.64 | % | |||||||
(Losses) gains on sale of premises and equipment |
(21 | ) | 1 | >100.00 | % | ||||||
Gains (losses) on securities available for sale |
206 | (32 | ) | >100.00 | % | ||||||
Losses on sales of foreclosed assets |
(260 | ) | (1 | ) | >100.00 | % | |||||
Mortgage banking-related fees |
1,357 | 645 | >100.00 | % | |||||||
Total noninterest income |
7,647 | 4,336 | 76.36 | % | |||||||
Noninterest Expense |
|||||||||||
Compensation and employee benefits |
11,763 | 7,037 | 67.16 | % | |||||||
Net occupancy |
1,834 | 885 | >100.00 | % | |||||||
Supplies and equipment |
2,170 | 1,166 | 86.11 | % | |||||||
Amortization-intangible assets |
531 | 161 | >100.00 | % | |||||||
Marketing |
831 | 393 | >100.00 | % | |||||||
State franchise taxes |
585 | 299 | 95.65 | % | |||||||
Data processing |
992 | 430 | >100.00 | % | |||||||
Telecommunications |
457 | 236 | 93.64 | % | |||||||
Professional fees |
640 | 378 | 69.31 | % | |||||||
Other operating expenses |
4,806 | 1,869 | >100.00 | % | |||||||
Total noninterest expense |
24,609 | 12,854 | 91.45 | % | |||||||
Income before income taxes |
9,536 | 6,397 | 49.07 | % | |||||||
Income tax expense |
3,396 | 1,856 | 82.97 | % | |||||||
Net income |
$ | 6,140 | $ | 4,541 | 35.21 | % |
QUARTERLY PERFORMANCE SUMMARY
StellarOne Corporation (NASDAQ: STEL)
(Dollars in thousands)
Percent | |||||||||||
For the Six Months Ended | Increase | ||||||||||
6/30/2008 | 6/30/2007 | (Decrease) | |||||||||
Interest Income |
|||||||||||
Loans, including fees |
$ | 66,469 | $ | 44,264 | 50.16 | % | |||||
Deposits in other banks |
12 | 10 | 20.00 | % | |||||||
Investment securities: |
|||||||||||
Taxable |
5,210 | 3,549 | 46.80 | % | |||||||
Tax-exempt |
1,832 | 1,869 | -1.98 | % | |||||||
Dividends |
606 | 260 | >100.00 | % | |||||||
Federal funds sold |
551 | 61 | >100.00 | % | |||||||
Total interest income |
74,680 | 50,013 | 49.32 | % | |||||||
Interest Expense |
|||||||||||
Deposits |
22,663 | 16,373 | 38.42 | % | |||||||
Federal funds purchased and securities sold under agreements to repurchase |
60 | 225 | -73.33 | % | |||||||
Federal Home Loan Bank advances |
3,539 | 1,746 | >100.00 | % | |||||||
Subordinated debt |
930 | 838 | 10.98 | % | |||||||
Commercial paper |
635 | 1,545 | -58.90 | % | |||||||
Other borrowings |
6 | 16 | -62.50 | % | |||||||
Total interest expense |
27,833 | 20,743 | 34.18 | % | |||||||
Net interest income |
46,847 | 29,270 | 60.05 | % | |||||||
Provision for loan losses |
3,787 | 165 | >100.00 | % | |||||||
Net interest income after provision for loan losses |
43,060 | 29,105 | 47.95 | % | |||||||
Noninterest Income |
|||||||||||
Retail banking fees |
6,463 | 3,663 | 76.44 | % | |||||||
Commissions and fees from fiduciary activities |
1,969 | 1,685 | 16.85 | % | |||||||
Brokerage fee income |
638 | 550 | 16.00 | % | |||||||
Other operating income |
2,099 | 1,059 | 98.21 | % | |||||||
Losses on sale of premises and equipment |
(64 | ) | (4 | ) | >100.00 | % | |||||
Gains (losses) on securities available for sale |
238 | (32 | ) | >100.00 | % | ||||||
Losses on sale of foreclosed assets |
(759 | ) | (1 | ) | N/A | ||||||
Mortgage banking-related fees |
2,228 | 1,244 | 79.10 | % | |||||||
Total noninterest income |
12,812 | 8,164 | 56.93 | % | |||||||
Noninterest Expense |
|||||||||||
Compensation and employee benefits |
22,931 | 13,856 | 65.50 | % | |||||||
Net occupancy |
2,995 | 1,759 | 70.27 | % | |||||||
Supplies and equipment |
3,710 | 2,286 | 62.29 | % | |||||||
Amortization-intangible assets |
691 | 325 | >100.00 | % | |||||||
Marketing |
1,248 | 642 | 94.39 | % | |||||||
State franchise taxes |
980 | 543 | 80.48 | % | |||||||
Data processing |
2,076 | 898 | >100.00 | % | |||||||
Telecommunications |
746 | 475 | 57.05 | % | |||||||
Professional fees |
1,214 | 528 | >100.00 | % | |||||||
Other operating expenses |
7,056 | 3,829 | 84.28 | % | |||||||
Total noninterest expense |
43,647 | 25,141 | 73.61 | % | |||||||
Income before income taxes |
12,225 | 12,128 | 0.80 | % | |||||||
Income tax expense |
3,998 | 3,568 | 12.05 | % | |||||||
Net income |
$ | 8,227 | $ | 8,560 | -3.89 | % |
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
THREE MONTHS ENDED JUNE 30, 2008 AND 2007
(Dollars in thousands)
Three months ended June 30, | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
2008 | 2007 | |||||||||||||||||
Average | Interest | Average | Average | Interest | Average | |||||||||||||
Dollars in thousands |
Balance | Inc/Exp | Rates | Balance | Inc/Exp | Rates | ||||||||||||
Assets |
||||||||||||||||||
Loans receivable, net |
$ | 2,288,804 | $ | 39,329 | 6.91 | % | $ | 1,209,394 | $ | 22,317 | 7.40 | % | ||||||
Investment securities |
||||||||||||||||||
Taxable |
307,571 | 3,500 | 4.50 | % | 164,210 | 1,849 | 4.45 | % | ||||||||||
Tax exempt |
95,604 | 1,531 | 6.34 | % | 93,876 | 1,425 | 6.01 | % | ||||||||||
Total investments |
403,175 | 5,031 | 4.94 | % | 258,086 | 3,274 | 5.02 | % | ||||||||||
Interest bearing deposits |
3,943 | 9 | 0.90 | % | 378 | 4 | 4.19 | % | ||||||||||
Federal funds sold |
63,198 | 340 | 2.13 | % | 667 | 9 | 5.34 | % | ||||||||||
470,316 | 5,380 | 4.53 | % | 259,131 | 3,287 | 5.02 | % | |||||||||||
Total earning assets |
2,759,120 | 44,709 | 6.51 | % | 1,468,525 | 25,604 | 6.99 | % | ||||||||||
Total nonearning assets |
290,706 | 114,050 | ||||||||||||||||
Total assets |
$ | 3,049,826 | $ | 1,582,575 | ||||||||||||||
Liabilities and Stockholders’ Equity |
||||||||||||||||||
Interest-bearing deposits |
||||||||||||||||||
Interest checking |
$ | 497,074 | $ | 506 | 0.41 | % | $ | 164,391 | $ | 70 | 0.17 | % | ||||||
Money market |
191,406 | 817 | 1.71 | % | 149,997 | 898 | 2.40 | % | ||||||||||
Savings |
211,158 | 1,755 | 3.33 | % | 95,490 | 325 | 1.37 | % | ||||||||||
Time deposits: |
||||||||||||||||||
Less than $100,000 |
769,415 | 5,664 | 2.95 | % | 397,884 | 4,199 | 4.23 | % | ||||||||||
$100,000 and more |
364,876 | 3,717 | 4.09 | % | 204,382 | 2,351 | 4.61 | % | ||||||||||
Total interest-bearing deposits |
2,033,929 | 12,459 | 2.46 | % | 1,012,144 | 7,843 | 3.11 | % | ||||||||||
Federal funds purchased and securities sold under agreements to repurchase |
7,919 | 5 | 0.25 | % | 8,352 | 117 | 5.54 | % | ||||||||||
Federal Home Loan Bank advances |
236,186 | 1,631 | 2.73 | % | 73,643 | 968 | 5.20 | % | ||||||||||
Subordinated debt |
32,991 | 466 | 5.59 | % | 20,619 | 421 | 8.08 | % | ||||||||||
Commercial paper |
23,821 | 156 | 2.59 | % | 69,605 | 791 | 4.50 | % | ||||||||||
Other borrowings |
573 | 3 | 2.07 | % | 715 | 11 | 6.09 | % | ||||||||||
301,490 | 2,261 | 2.97 | % | 172,934 | 2,308 | 5.28 | % | |||||||||||
Total interest-bearing liabilities |
2,335,419 | 14,720 | 2.53 | % | 1,185,078 | 10,151 | 3.43 | % | ||||||||||
Total noninterest-bearing liabilities |
347,080 | 243,452 | ||||||||||||||||
Total liabilities |
2,682,499 | 1,428,530 | ||||||||||||||||
Stockholders’ equity |
367,327 | 154,045 | ||||||||||||||||
Total liabilities and stockholders’ equity |
$ | 3,049,826 | $ | 1,582,575 | ||||||||||||||
Net interest income (tax equivalent) |
$ | 29,989 | $ | 15,453 | ||||||||||||||
Average interest rate spread |
3.98 | % | 3.56 | % | ||||||||||||||
Interest expense as percentage of average earning assets |
2.14 | % | 2.77 | % | ||||||||||||||
Net interest margin |
4.37 | % | 4.22 | % |
STELLARONE CORPORATION
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
SIX MONTHS ENDED JUNE 30, 2008 AND 2007
(Dollars in thousands)
Six months ended June 30, | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
2008 | 2007 | |||||||||||||||||
Average | Interest | Average | Average | Interest | Average | |||||||||||||
Dollars in thousands |
Balance | Inc/Exp | Rates | Balance | Inc/Exp | Rates | ||||||||||||
Assets |
||||||||||||||||||
Loans receivable, net |
$ | 1,958,566 | $ | 66,628 | 6.84 | % | $ | 1,214,647 | $ | 44,343 | 7.36 | % | ||||||
Investment securities |
||||||||||||||||||
Taxable |
255,090 | 6,468 | 5.02 | % | 169,495 | 3,809 | 4.47 | % | ||||||||||
Tax exempt |
89,971 | 1,838 | 4.04 | % | 94,363 | 2,876 | 6.06 | % | ||||||||||
Total investments |
345,061 | 8,306 | 4.76 | % | 263,858 | 6,685 | 5.04 | % | ||||||||||
Interest bearing deposits |
2,214 | 12 | 1.07 | % | 501 | 10 | 3.97 | % | ||||||||||
Federal funds sold |
44,910 | 523 | 2.29 | % | 2,241 | 61 | 5.41 | % | ||||||||||
392,185 | 8,841 | 4.46 | % | 266,600 | 6,756 | 5.04 | % | |||||||||||
Total earning assets |
2,350,751 | 75,469 | 6.45 | % | 1,481,247 | 51,099 | 6.96 | % | ||||||||||
Total nonearning assets |
228,856 | 113,922 | ||||||||||||||||
Total assets |
$ | 2,579,607 | $ | 1,595,169 | ||||||||||||||
Liabilities and Stockholders’ Equity |
||||||||||||||||||
Interest-bearing deposits |
||||||||||||||||||
Interest checking |
$ | 401,052 | $ | 899 | 0.45 | % | $ | 161,918 | $ | 133 | 0.17 | % | ||||||
Money market |
161,291 | 1,482 | 1.84 | % | 164,755 | 2,154 | 2.64 | % | ||||||||||
Savings |
169,115 | 2,796 | 3.32 | % | 96,002 | 627 | 1.32 | % | ||||||||||
Time deposits: |
||||||||||||||||||
Less than $100,000 |
641,569 | 10,962 | 3.43 | % | 406,338 | 8,632 | 4.28 | % | ||||||||||
$100,000 and more |
310,141 | 6,525 | 4.22 | % | 209,001 | 4,827 | 4.66 | % | ||||||||||
Total interest-bearing deposits |
1,683,168 | 22,664 | 2.70 | % | 1,038,014 | 16,373 | 3.18 | % | ||||||||||
Federal funds purchased and securities sold under agreements to repurchase |
6,681 | 59 | 1.75 | % | 8,118 | 225 | 5.51 | % | ||||||||||
Federal Home Loan Bank advances |
210,851 | 3,538 | 3.32 | % | 67,956 | 1,745 | 5.11 | % | ||||||||||
Subordinated debt |
28,708 | 930 | 6.41 | % | 20,619 | 838 | 8.08 | % | ||||||||||
Commercial paper |
49,010 | 635 | 2.56 | % | 66,721 | 1,545 | 4.61 | % | ||||||||||
Other borrowings |
678 | 6 | 1.75 | % | 531 | 16 | 5.99 | % | ||||||||||
295,928 | 5,168 | 3.45 | % | 163,945 | 4,369 | 5.30 | % | |||||||||||
Total interest-bearing liabilities |
1,979,096 | 27,832 | 2.81 | % | 1,201,959 | 20,742 | 3.47 | % | ||||||||||
Total noninterest-bearing liabilities |
306,688 | 240,525 | ||||||||||||||||
Total liabilities |
2,285,784 | 1,442,484 | ||||||||||||||||
Stockholders’ equity |
293,823 | 152,685 | ||||||||||||||||
Total liabilities and stockholders’ equity |
$ | 2,579,607 | $ | 1,595,169 | ||||||||||||||
Net interest income (tax equivalent) |
$ | 47,637 | $ | 30,357 | ||||||||||||||
Average interest rate spread |
3.64 | % | 3.49 | % | ||||||||||||||
Interest expense as percentage of average earning assets |
2.37 | % | 2.82 | % | ||||||||||||||
Net interest margin |
4.08 | % | 4.14 | % |