Yadkin Bank, which has been focused on cutting costs in the wake of last year's merger-of-equals between VantageSouth Bank and Yadkin Bank, plans to sell or close a half-dozen under-performing branches in the third quarter.
Terry Earley, chief financial officer of the Raleigh-based bank, said in an interview that the bank isn’t disclosing which branches it is eliminating until it notifies customers affected by the move. But, he added, none of the branches are in the Triangle.
In fact, Earley said, Yadkin, which today has more than 70 offices, is adding a new branch in Raleigh’s Five Points neighborhood. The new branch is scheduled to open next month.
CEO Scott Custer said during a conference call that the branch-cutting decision marked "phase 2" of the bank's cost-cutting efforts.
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"Once the dust settles in any transaction…you have a better feel for the business and you have a better feel for how your new branches are operating," Custer said.
Yadkin also reported that it eliminated about 20 jobs in the first quarter, reducing its total workforce to about 880. Those cuts came on top of about 85 jobs that were eliminated following the merger last year – mostly through attrition but also through layoffs.
Yadkin also announced that Joe Towell, the company's executive chairman, is transitioning to the role of chairman as of 2015. In his new role, Towell will no longer be involved in day-to-day operations and will no longer be a bank employee.
But, as chairman, “we’ll still have the benefit of his experience and perspective,” Earley said.
Towell, who was CEO of the pre-merger Yadkin Bank, said during the conference call that his shift to chairman was "a normal, logical event in the progression of this deal. My commitment to the company, my commitment to this merger of equals and the success thereof, remains unchanged."
He added: "I'm looking forward to the transition from executive (chairman) to chairman."
Yadkin reported first-quarter net income of $9.6 million, or 30 cents per share. Because of accounting rules governing the merger, the first-quarter results aren't comparable to the bank's year-ago results.
Although net income was down from $14.7 million in the fourth quarter, Custer noted that the first-quarter is traditionally slow as a result of seasonal factors and fewer days in the quarter. He said that the bank's first-quarter operating earnings were up 28 percent, on a per-share basis, compared to the combined operating earnings of the pre-merger Yadkin and VantageSouth of a year ago.
"This is a solid, well-done quarter," Towell said. "It sets the stage for 2015."
Yadkin also said that it has won approval from the Federal Reserve Bank of Richmond to pay off its $28.4 million debt to the U.S. Treasury, money the bank received during the recession from the Troubled Asset Relief Program.
Custer called the repayment "a significant income enhancer." The bank calculates that eliminating the debt will improve its annual re-tax earnings by $2.6 million.