CommunityOne Bancorp (COB) in Asheboro, N.C., reported its second consecutive quarterly profit.

The $2 billion-asset company earned $2.3 million, or 11 cents a share, in the fourth quarter, compared to a loss of $6.3 million a year earlier. In the third quarter, CommunityOne had its first profitable quarter since 2008. Its recovery was driven by a $310 million recapitalization led by private-equity investors and its purchase of Bank of Granite in Granite Falls, N.C.

CommunityOne's net interest income rose 11%, to $16.4 million, largely because of lower interest expenses. Loans held for investment grew at an annualized rate of 6% because of more loan demand, better credit quality and a residential mortgage loan pool purchase of $23 million. CommunityOne's net interest margin expanded 56 basis points from a year earlier, to 3.52%.

The company's noninterest income fell 41%, to $7 million, largely because of lower mortgage revenue.

CommunityOne's noninterest expense fell 32%, to $17.6 million. The company benefited from lower professional fees and costs from other real estate owned. It was also buoyed by the absence of merger-related expense in the fourth quarter, compared to $884,000 in merger costs a year earlier.

Better credit quality allowed CommunityOne to cut its loan-loss provision by 44%, to $1.8 million.

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