First Bancorp in Southern Pines, N.C., posted a 20% jump in its second-quarter earnings as its provision for loan losses declined and fee income increased.
The $3 billion-asset parent of First Bank said after markets closed Wednesday that earned $6.4 million in the quarter that ended June 30, compared to $5.7 million for the same period in 2013. Earnings per share rose 19%, to 32 cents.
The company reduced its provision by roughly 34%, to $3.7 million, as loan growth slowed and asset quality stabilized. However, the company did boost its provision on loans covered by loss-sharing agreements with the Federal Deposit Insurance Corp. by 62% as several of those covered loans deteriorated during the quarter.
First Bank acquired failed banks in Wilmington and Asheville, N.C., in 2009 and 2011.
Net interest income fell 5%, to $33.8 million, but the decline was tempered by 26% drop in its interest expense as deposit costs fell.
Noninterest income increased 10.8%, to nearly $5 million, driven by a 6% increase in service charges on deposit accounts and a 9.5% increase in commissions, fees and other charges. Noninterest expenses fell 4%, to $24.7 million, primarily on lower operating expenses and a compensation costs.
The net interest margin was 4.65% compared to 5.10% for the second quarter of 2013, primarily because the amount of discount accretion on loans purchased in failed-bank acquisitions fell almost 26%, to $4.9 million, the company said.