Cape Fear Bank Corp. in Wilmington, N.C., reported a net loss Friday of $441,000, or 12 cents per share, for the first quarter, compared with a $435,000 profit, or 11 cents per share, the year earlier.
The $470 million-asset company attributed much of its loss to nonperforming construction and development loans, and a tightening of its net interest margin.
Nonperforming loans were up nearly 400%, year-over-year, to $6.7 million, but actually fell about 20% compared with the fourth quarter. Most nonperformers were related to two large land development and residential construction deals in the coastal market, the company said.
Cape Fear's net interest margin contracted 70 basis points year-over-year and 31 basis points from the fourth quarter, to 2.41%.
Cameron Coburn, Cape Fear's chairman, president, and chief executive officer, said in a press release that the company has restructured its balance sheet to make it less asset-sensitive in the current declining rate environment. Variable-rate loans, which reprice immediately, now make up 51% of the company's loan portfolio, compared to 64% a year before.
