Shares of First NBC Bank Holdings (NBCB) in New Orleans dipped after it reported a decline in quarterly income in its first earnings report since going public in May.
The $3 billion-asset company reported a second-quarter profit of $8.5 million, down 8.2% from the second quarter of 2012. The newly public company's stock dipped approximately 3% after the earnings announcement on Wednesday, though it rebounded Thursday morning to just over $26 a share. The company's initial public offering price was $24.
The dip in profit was due largely to a declining interest margin. Despite a 21% increase in loans year over year, net interest income rose just 7%, to $19.3 million and the interest margin declined by 39 basis points, to 3.03%, in the first two quarters of 2012 compared to the same period in 2012. The bank did not report its net interest margin for the second quarter alone, but Keefe, Bruyette and Woods analysts estimated it to be 2.90%.
Second-quarter noninterest income fell 31%, to $2.7 million, due primarily to lower gains on loan sales. Revenue from service charges and ATMs also dipped.
Noninterest expenses fell by 3%, to $15.2 million, as compensation costs decreased. The company boosted its provision for loan losses rose by one-third, to $1.8 million, even though net chargeoffs fell by 86%, to $100,000.
NBC raised approximately $100 million through its IPO and has it said it plans to use the proceeds to fund growth, possibly through acquisitions.