Integrity Bancshares Inc. in Alpharetta, Ga., said strong loan growth fueled a double-digit rise in first-quarter earnings but noted that credit quality had deteriorated.
The $1.2 billion-asset company said on Friday that its net income rose 35%, to $2.9 million, on a 40% increase in average earning assets, to $313 million. Net loans rose 29%, to $986 million, from a year earlier, helping net interest income to rise 17.5%, to $10.4 million.
Net interest margin contracted slightly, to 3.81%, from 3.82% a year earlier, but the asset-sensitive company said it expects margin compression to subside in future quarters as liabilities reprice lower.
Nonperforming assets jumped to $20.9 million, from $1.5 million a year ago. If some of the past-due loans are not restructured by May 18, Integrity said, it would have to take a "substantial" loan-loss provision in the second quarter, though it did not say how much.
