Yadkin Valley Financial raises $45 million in capital

Yadkin Valley Financial Corp. announced Thursday that it has finished a $45 million capital raise that the bank will use to work troubled loans and foreclosed real estate off its books.

Institutional investors and bank executives bought $45 million in preferred stock that will convert to more than 16 million shares of common stock pending a shareholder vote. The money will be used to deal with $67 million of problem assets, including $50 million in troubled loans.

"This capital raise is the result of many months of internal work to determine the best strategy for the company to improve its capital ratios and risk profile," CEO Joe Towell said in a statement. "With a bolstered capital position and an improving credit profile, we are looking toward the opportunities available to us as we serve our customers throughout the Carolinas."

The Elkin-based company operates American Community Bank in Charlotte.

The announcement came in conjunction with the bank's third-quarter earnings report. Yadkin Valley reported a loss of $81,000 in the quarter, or zero cents per share -- which the bank called a "breakeven" quarter.

The bank earned $2.9 million -- 15 cents per share -- in the third quarter last year.

The amount of the capital raise is roughly in line with the Troubled Asset Relief Program preferred stock investment the U.S. Treasury auctioned off last month. Yadkin Valley had received $49 million through the bailout program. It was sold to investors for $43.5 million.