Stonegate Bank (SGBK) in Fort Lauderdale, Fla., beefed up its lending team even as it reported higher profits for the 27th consecutive quarter.
It reported a 55% jump in net income to $2.4 million in the third quarter compared with a year earlier. Stonegate's strategy of shrinking its investment portfolio and organic loan growth fueled profits, the $942 million-asset bank said.
Stonegate had security gains of $639,000 in the third quarter from shrinking the amount of investments and duration of its securities. Loans grew by $91 million, or 15%, year to date as it expanded sales staff in each of its markets. The hires raised noninterest expenses but significantly expanded net interest margins thanks to the new loans generated through the sales force, Stonegate said.
Net interest margin averaged 4.2% in September, up from 4% in June.
"The bank is doing extremely well in terms of organic loan growth as well as overall profitability," Stonegate’s president and chief executive, Dave Seleski, said in a press release. "I am encouraged that this trend will continue in coming quarters as the general Florida economy continues to stabilize and in some regions improve."
Still, maintaining that growth will be tricky, Seleski said.
"The challenge in future quarters is maintaining the growth and margin without significantly adding to overall noninterest expense," he said.