Atlantic Coast Financial (ACFC) of Jacksonville, Fla., reported a narrower loss in the first quarter than in previous quarters as it reduced its overhead and reiterated that it is still considering selling itself.
The $777 million-asset company said late Tuesday that it lost $1.7 million in the first quarter, down from a loss of $3.4 million a year earlier and $4 million in the fourth quarter. The bank has now lost money in 15 consecutive quarters.
Atlantic Coast's noninterest expense fell almost 31%, to $5.4 million, as it reduced compensation and benefit costs. Expenses on foreclosed assets also declined partly because of gains on the sale of other real estate owned.
Higher gains on the sale of Small Business Administration loans and increased interchange fee income led to a 16% rise, to $2.2 million, in noninterest income.
The company's provision for loan losses totaled $3.5 million, down roughly 33% from the fourth quarter but up 25% from a year earlier. Net chargeoffs totaled $5.5 million, up 111% year over year. The quarter included a $1.7 million chargeoff for a commercial real estate loan that was recorded after Atlantic Coast agreed to a short sale in the second quarter.
Since the company remains concerned about the "inconsistent and slow pace of the economic recovery" in its markets, Atlantic Coast will continue focusing on reducing operating expenses, improving credit quality and developing its retail community banking model, G. Thomas Frankland, president and chief executive, said in a news release Tuesday.
Atlantic Coast also said Tuesday that "in light of the losses the company has incurred over the past four years" it was still exploring its options, including possibly being acquired or holding a rights offering to raise capital. It is currently operating under an agreement with regulators to maintain a Tier 1 core capital ratio of 7%. At March 31, its Tier 1 leverage ratio was 5.71%.
The company said in November that it had gotten approval from the Federal Reserve Board to hire investment bank Stifel Nicolaus to pursue its alternatives.
Atlantic Coast's thinly traded shares were up nearly 12% midday Wednesday, to $2.35.