CommunityOne Bancorp (COB) in Asheboro, N.C., reported its first quarterly profit since 2008.
The $2 billion-asset company earned $4 million in the third quarter, compared to a loss of $4.7 million a year earlier. The company predicted its return to profitability in August. A $310 million recapitalization by private-equity investors, along with the purchase of Bank of Granite and improved economic conditions all factored into the recovery.
CommunityOne's net interest income climbed 14% from a year earlier, to $17.4 million, as average loan and securities balances increased. Its net interest margin widened 81 basis points from a year earlier, to 3.76%.
Noninterest income fell 6% from a year earlier, to $4.4 million, as mortgage loan income fell 44%.
Noninterest expenses decreased 27% from a year earlier, to $17.9 million, because of a $98,000 recovery from the company's allowance for other real estate owned and reduced personnel and occupancy expenses tied to its purchase of Bank of Granite.
Improved credit quality allowed CommunityOne to recover $350,000 from its loan-loss provision. The company also recovered $700,000 from net loan chargeoffs.
CommunityOne was released from a deferred prosecution agreement tied to its Bank Secrecy Act and anti-money laundering program in September. The company had faced possible prosecution for allegedly turning a blind eye to a customer's $40 million Ponzi scheme. A related case pending in the U.S. District Court for the Western District of North Carolina was also dismissed.
The company changed its name from FNB United in June.