Community Capital Corp. in Greenwood, S.C., said its earnings jumped sharply in the first quarter as credit quality showed significant improvement.
The $750 million-asset company reported late Monday that its earnings rose 85% year over year, to $1.6 million. It recorded a loss of $1.4 million for the fourth quarter.
Nonperforming assets totaled $42.8 million at the end of the first quarter, down 14% from the end of the fourth quarter, and made up 5.73% of total assets.
A year earlier, nonperforming assets totaled $36.6 million.
Despite the decline in problem assets from the fourth quarter, Community Capital's provision for loan losses increased 60% from the fourth quarter. It was down 20% from a year earlier.
William G. Stevens, Community Capital's president and chief executive officer, said in a press release that it has marked the problem assets down to a level where it can begin selling them at little or no additional loss. The company said it is set to close on $5 million of problem asset sales this quarter.
Community Capital also said its results benefited from a reduction of approximately 20% of its staff in the past year.
Salaries and employee benefits totaled $2.4 million at the end of the first quarter, down 6% from a year earlier.
The company said that it has significantly reduced its reliance on expensive wholesale financing. Its interest expense totaled $2.8 million, down 20% from a year earlier.