VantageSouth Bank and Yadkin Bank, which merged this month to create the largest community bank based in North Carolina, each reported robust second-quarter results.
Raleigh-based VantageSouth and Statesville-based Yadkin combined on July 4 and are now operating under the Yadkin brand. But the two banks reported separate second-quarter financial results given that the quarter ended June 30.
“Both companies have had a solid first half of 2014,” Joe Towell, executive chairman of the combined banks and their corporate parent, Yadkin Financial, said during a conference call. “While we’ve been focused on merger and merger-integration work, we have also delivered quality earnings per share and maintained a good focus on our core business.”
The new Yadkin has headquarters in Raleigh, but the banking business is based in Statesville. Scott Custer, president and CEO of VantageSouth, has the identical role at the combined bank. Towell, the executive chairman, previously was CEO of Yadkin.
Yadkin reported net income of $3.8 million, up from $3.3 million a year earlier. Net income was $4.3 million in the latest quarter after excluding merger-related expenses. VantageSouth reported net income of $3.5 million, a 67 percent increase from a year ago.
“VantageSouth on its own had a record quarter,” Custer said. “Yadkin had a strong quarter.”
If the two banks had been combined in the second quarter, they would have generated generated operating income of $15.5 million after excluding taxes and merger costs, up from a combined $12.6 million in the first quarter. “We feel good and really pleased with where we are today, and we think we have great momentum as well,” Custer said.
The merger forged a bank with 74 branches in North Carolina and South Carolina.
Shares of Yadkin, which moved from the Nasdaq to the New York Stock Exchange in conjunction with the merger, closed Wednesday at $18.58, up 48 cents. The company’s shares have risen 9 percent this year.
Analyst Brady Gailey of Keefe, Bruyette & Woods upgraded his rating on the stock to “outperform,” the equivalent of a buy, after Yadkin’s earnings release.
Gailey wrote in a research note that earnings per share exceeded expectations and, given the pullback since shares approached $22 in March, the stock has become undervalued. Gailey also noted that he has “long been a fan of this merger of equals and the opportunity Yadkin will have going forward.”