Monday, StellarOne Corp. (STEL), the holding company of StellarOne Bank, posted a loss for the second quarter compared with a profit last year, hurt by lower net interest income, higher loan-loss provisions and a special assessment from the FDIC.
The Charlottesville, Virginia-based company posted a net loss available to common shareholders of $785 thousand or $0.03 per share, compared to a net income available to common shareholders of $6.14 million or $0.27 per share in the prior-year period.
On average, nine analysts polled by Thomson Reuters expected the company to report loss of $0.05 per share. Analysts' estimates typically exclude special items.
Latest quarter results were impacted by net charge-offs of $6.9 million and by the special assessment from the Federal Deposit Insurance Corporation or FDIC totaling $1.3 million.
For the three months ended June 30, net interest income decreased 25% to $22.08 million from $29.33 million in the year-ago period. Non-interest income for the quarter was $7.66 million, compared to $7.65 million last year.
Four analysts had consensus revenue estimate of $30.45 million for the quarter.
Provision for loan losses for the quarter more than doubled to $6.5 million from $2.84 million in the same period last year.
President Barham commented "Our mortgage banking division had a record quarter with revenues of $2.1 million and a solid earnings contribution. Our consolidated pre-tax, pre-provision quarterly earnings of $5.7 million were impacted by the special $1.3 million FDIC assessment accrued during the period, but are indicative of continuing core earnings stability."
For the first half of the year, the company reported a net loss available to common shareholders of $1.08 million or $0.05 per share, compared to a net income available to common shareholders of $8.23 million or $0.44 per share in the prior year period.
Net interest income for the period decreased to $44.63 million from $46.85 million in the year-ago period. Provision for loan losses increased to $14.25 million from $3.79 million in 2008.
Non-interest income for the period increased to $14.64 million from $12.81 million in 2008.
Looking ahead, Barham said, "StellarOne anticipates elevated non-performing assets and net charge-off levels throughout the remainder of 2009, and will likely see some migration of non-accrual loans to foreclosed assets."
STEL is currently trading at $14.89 on the Nasdaq, down $0.01 or 0.07%.
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