Yadkin Valley Financial Corp. in Elkin, N.C., said Friday that its fourth-quarter earnings plunged 93% from a year earlier, to $217,000.

The $1.5 billion-asset company cited a 158% increase in the loan-loss provision, to $4.36 million, as nonperformers and chargeoffs rose.

It also said a sharp drop in the prime rate last year caused its fourth-quarter net interest income to fall 6% to $9.9 million.

Nonperforming assets jumped 548% from a year earlier and 31% from the third quarter, to $16.6 million, or 1.09% of total assets.

"While this is above our historic average, our asset quality remains attractive relative to our peers and the industry as a whole, which revealed nonperforming assets as a percentage of total assets above 2% on average as of the fourth quarter of 2008," Bill Long, the president and chief executive officer, said in a press release.

The company said about 25% to 30% of its nonaccrual loans continue to pay as agreed. A $1.8 million loan to a residential builder accounted for most of the increase in its nonperformers.

Its acquisition of Cardinal State Bank helped boost yearend total loans $286 million, or 30%, and total deposits $192 million, or 20%. Excluding the acquisition, loans increased 15% and deposits 2%.

Yadkin Valley Financial also said it has been approved for a $36 million infusion from the Treasury Department’s Capital Purchase Program.

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