SCBT Financial Corp. of Columbia, S.C., said its first-quarter earnings skyrocketed, largely as a result of its acquisition of the failed Community Bank and Trust in Cornelia, Ga.
The $3.5 billion-asset SCBT said its profit rose 1,224% year over year, to $49 million from $3.7 million.
Driving the surge was a $98.1 million gain related to its takeover of the $1.2 billion-asset Community Bank, SCBT said Friday.
Given the accounting treatment of writedowns and loss-sharing agreements, failed-bank acquirers often record an up-front gain on transactions.
The gain in the first quarter, however, was offset by a $20.8 million loan-loss provision. a fourfold increase from a year earlier and double the fourth-quarter provision.
The bulk of the provision went to cover chargeoffs.
The company reported net chargeoffs of $16.9 million, up 275% from a year earlier.
At the end of the first quarter, nonperforming assets — excluding those covered by loss-sharing agreements — totaled $63.1 million, or 1.99% of assets overall. That represents an increase of 104% from a year earlier.
The earnings were also affected by a $5.6 million other-than-temporary impairment charge on SCBT's pooled trust-preferred securities.