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Crescent Financial Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 15, 2012 06:14AM
Crescent Financial Corp. (CRFN) filed Quarterly Report for the period ended 2012-03-31. Crescent Finl has a market cap of $162.1 million; its shares were traded at around $5.49 with and P/S ratio of 3.2.
Highlight of Business Operations:In June 2009, the Company entered into derivative financial instruments which swapped the variable rate payments for fixed payments. These instruments consisted of a three-year and four-year swap, each for one-half of the notional amount of the TRUPs for fixed rates of 5.49% and 5.97%, respectively. Due to the deferral of interest payments on the TRUPs, the associated interest rate swaps no longer qualify for cash flow hedge accounting and are therefore marked to fair value through earnings.
In June 2009, the Bank entered into derivative financial instruments which swapped the variable rate payments for fixed payments. These instruments consisted of a three-year and four-year swap, each for one-half of the notional amount of the subordinated debt for fixed rates of 6.39% and 6.87%, respectively. At the Piedmont Investment, these swaps were no longer designated as qualifying for hedge accounting and therefore mark them to fair value through earnings.
Total assets at March 31, 2012 were $825.6 million, which was a decrease of $8.9 million, or 1%, from total assets of $834.5 million at December 31, 2011. Earning assets totaled $717.7 million, or 87% of total assets, at March 31, 2012 compared to $725.4 million, or 87% of total assets, at December 31, 2011. Earning assets at March 31, 2012 consisted of $515.8 million in gross loans held for investment, $153.6 million in investment securities and Federal Home Loan Bank (“FHLB”) stock, $45.0 in federal funds sold and interest-earning deposits with correspondent banks and $3.3 million in mortgage loans held for sale. Earning assets at December 31, 2011 consisted of $552.9 million in gross loans held for investment, $152.2 million in investment securities and FHLB stock, $16.5 million in federal funds sold and interest-earning deposits and $3.8 million in mortgage loans held for sale. Total deposits and stockholders’ equity at March 31, 2012 were $658.8 million and $144.6 million, respectively, compared to $674.4 million and $143.1 million, respectively, at December 31, 2011.
Gross loans held for investment, net of deferred loan fees, totaled $515.8 million at March 31, 2012 reflecting a $37.1 million, or 7%, decrease compared to $552.9 million at December 31, 2011. This decline resulted from a combination of principal payments in the normal course of business, problem asset resolutions and loan sales. Most of the loan categories experienced a balance reduction in the first quarter of 2012. The changes in the portfolio, by category, were as follows: construction and land development loans, $13.3 million decline, or 16%; commercial real estate mortgages, $20.8 million decline, or 7%; residential one-to-four family mortgage loans, $3.7 million decline, or 6%; commercial and industrial loans, $3.8 million increase, or 10%; home equity lines and loans, $3.6 million decline, or 7%; and consumer loans, $0.5 million increase, or 14%.
Total non-interest earning assets decreased from $109.3 million at December 31, 2011 to $108.6 million at March 31, 2012. Accrued interest receivable, cash and due from banks, and premises and equipment increased by $0.7 million, $3.2 million and $0.3 million, respectively. Foreclosed assets declined by $3.9 million primarily as a result of the Company receiving $4.5 million in proceeds from dispositions. The decline in foreclosed assets was partially offset by transfers into other real estate owned.
Stocks Discussed: CRFN,