Fewer loan losses and added fees provided a spark to third-quarter results at Park Sterling (PSTB) in Charlotte, N.C.
The $1.1 billion-asset company’s earned $620,000 in the third quarter, compared with a loss of $1.4 million a year earlier. The results were partially influenced by the company’s November 2011 purchase of Community Capital in Greenwood, S.C.
Net interest income rose 160% from a year earlier, to $9.9 million. The net interest margin expanded by 129 basis points from a year earlier, to 3.97%. Park Sterling recorded a $7,000 loan-loss provision for the third quarter, compared with $568,000 a year earlier. Chargeoffs totaled just $231,000, marking a significant decline from $2 million a year earlier.
Noninterest income jumped to $3.3 million, compared with $111,000 a year earlier. Mortgage banking revenue rose 23% from a year earlier, to $662,000. Deposit services revenue increased 8% from a year earlier, to $324,000. , up 8% from a year earlier.
Noninterest expense rose 134% from a year earlier, to $12.2 million, because of expenses tied to loan collection, other real estate owned, growth initiatives and the Community Capital acquisition.
Park Sterling’s portfolio of commercial loans increased 56% from a year earlier, to $70 million. Residential mortgages nearly tripled from a year earlier, to $58 million.
“Park Sterling's third quarter was marked by continued net loan growth in our metro markets, continued improvement in asset quality and continued profitability,” James C. Cherry, the company’s chief executive, said in a press release. “The increase from the prior period resulted primarily from a lower provision for loan losses and higher noninterest income, led by strong results from our residential mortgage banking activities.”
In October, Park Sterling completed its $83 million purchase of Citizens South Banking in Gastonia, N.C., in a deal that doubled Park Sterling’s size.