Southcoast Financial Corp. (SOCB) in Mt. Pleasant, S.C., swung to a profit in the fourth quarter thanks to improvements to its loan portfolio and a lower cost of funds.

The parent of $438 million-asset Southcoast Community Bank, which operates nine branches in the Charleston region, posted quarterly earnings of $929,000, or 15 cents a share, on Thursday.

It was Southcoast's fourth straight quarter in the black. The company returned to profitability earlier this year after a $4.8 million loss in the final quarter of 2011.

Southcoast's 2011 full-year loss of $16.5 million was driven by a $10 million loan-loss provision.

For the fourth quarter of 2012, net interest income increased 22% from a year earlier, to $3.4 million, as interest expenses fell 24%. The bank made no provision for loan losses in the fourth quarter, compared to a $3.4 million provision a year earlier.

Noninterest income rose 17%, to $727,000.

Southcoast's loan portfolio also saw improvements. The bank reduced its percentage of nonperforming assets to 4.41% from 7.16% at the end of 2011.

Southcoast's stock was up more than 3% following its earnings announcement, to nearly $5 a share on Thursday afternoon.

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