OREANDA-NEWS. Yadkin Financial Corporation, the parent company of Yadkin Bank, today announced financial results for the second quarter ended June 30, 2016.

"We are pleased to report the Company achieved record net income and net operating earnings in the second quarter of 2016," announced Scott Custer, Yadkin's CEO. "The strong performance reflects the impact of the acquisition of NewBridge Bancorp earlier this year and robust growth within the entire branch network."

Second Quarter 2016 Performance Highlights

  • Net income available to common shareholders totaled $17.4 million, or $0.34 per diluted share, in Q2 2016 compared to $0.20 per diluted share in Q1 2016 and $0.33 per diluted share in Q2 2015. Net operating earnings available to common shareholders, which excludes certain non-operating income and expenses, improved to $21.2 million, or $0.41 per diluted share, in Q2 2016 from $0.39 per diluted share in Q1 2016 and $0.38 per diluted share, in Q2 2015.
  • Annualized return on average equity was 7.05 percent in Q2 2016, compared to 4.42 percent in Q1 2016 and 7.71 percent in Q2 2015. Annualized return on average tangible common equity was 11.89 percent in Q2 2016 compared to 7.18 percent in Q1 2016 and 11.90 percent in Q2 2015. Annualized net operating return on average tangible common equity increased to 14.35 percent in Q2 2016 from 13.14 percent in Q1 2016 and 11.94 in Q2 2015.
  • The efficiency ratio, the ratio of expenses to total revenues, improved to 63.5 percent in Q2 2016 from 75.4 percent in Q1 2016 and 64.5 percent in Q2 2015. The operating efficiency ratio improved to 55.5 percent in Q2 2016 from 58.1 percent in Q1 2016 and 60.0 percent in Q2 2015.
  • On an annualized basis, net charge-offs were 0.07 percent of average loans during Q2 2016, compared to 0.15% during Q1 2016.
  • Shareholder's equity totaled $1.00 billion as of June 30, 2016, compared to $984.6 million as of March 31, 2016. Tangible  common equity to tangible assets was 8.94 percent as of June 30, 2016, compared to 8.72 percent as of March 31, 2016.

Acquisition of NewBridge Bancorp

On March 1, 2016, the Company completed its acquisition of NewBridge Bancorp (“NewBridge”), pursuant to an Agreement and Plan of Merger, dated October 12, 2015 (the "NewBridge Merger"). Following the NewBridge Merger, the Company is currently the fourth largest bank headquartered in North Carolina and ranks first by North Carolina deposit market share among community banks. The Company now operates 100 full-service banking locations in its North Carolina and South Carolina banking network and has a significant presence in all major North Carolina markets, including Charlotte, the Raleigh-Durham-Chapel Hill Triangle, the Piedmont Triad, and Wilmington. The Company plans to complete the NewBridge systems integration in September 2016. The NewBridge Merger added $2.1 billion in loans, $2.0 billion in deposits, and resulted in significant changes across most balance sheet categories. Additionally, since the merger was effective on March 1, 2016, the Company's results of operations for the first quarter reflect the impact of NewBridge for only one month. As a result, the Company's quarterly and year-to-date 2016 financial results may not be comparable to financial results in prior periods.

Results of Operations and Asset Quality

Net interest income totaled $63.5 million in the second quarter of 2016, which was a significant increase from $48.0 million in the first quarter of 2016. This increase was due to the full quarter impact of NewBridge's interest-earning assets as well as organic loan growth. Net interest margin decreased from 4.05 percent in the first quarter of 2016 to 3.94 percent in the second quarter of 2016, primarily due to lower-yielding acquired NewBridge loans and lower investment securities yields. Core net interest margin, which excludes the impact of accretion income on net interest income, was 3.63 percent in the second quarter of 2016, compared to 3.70 percent in the first quarter of 2016.

Net accretion income on acquired loans totaled $4.8 million in the second quarter of 2016, which consisted of $723 thousand of net accretion on purchased credit-impaired ("PCI") loans and $4.1 million of accretion income on purchased non-impaired loans. Net accretion income on acquired loans in the first quarter of 2016 totaled $3.6 million, which included $1.1 million of net accretion on PCI loans and $2.4 million of net accretion income on purchased non-impaired loans. Net accretion income on purchased non-impaired loans included $1.9 million of accelerated accretion due to principal prepayments in the second quarter of 2016 compared to $767 thousand in the first quarter of 2016. Higher non-PCI accretion income during the second quarter of 2016 reflected the full quarter impact of the NewBridge Merger.

Provision for loan losses was $2.3 million in the second quarter of 2016 compared to $1.9 million in the first quarter of 2016.The following table summarizes changes in the allowance for loan losses ("ALLL") for the quarters presented.