Coastal Banking Co. (CBCO) in Beaufort, S.C., swung to a profit in the second quarter, aided mightily by an accounting reversal.
The $401 million-asset company reported earnings of $2 million, compared with a loss of $110,360 a year earlier. A $1.7 million reversal of the company's deferred tax asset valuation reserve accounted for 85% of the quarter's profit.
Noninterest income fell 23% to $8.5 million, despite a 28% increase in income from Small Business Administration loans. A 28% decrease in mortgage banking income contributed to the decline.
Noninterest expenses fell 19% to $10.8 million.
Net interest income fell 7% to $2.9 million, as the net interest margin tightened 6 basis points to 3.16%.
The loan-loss provision declined a striking 96% to $56,719. Net chargeoffs fell 72% to $412,000.
The Office of the Comptroller of Currency terminated a written agreement with Coastal Banking earlier this week.