State Bank Financial (STBZ) in Atlanta reported a drop in quarterly earnings as income tied its past failed-bank deals fell.
The $2.6 billion-asset company's third-quarter earnings declined 70% from the second quarter and 80% from a year earlier, to $3.4 million.
Net interest income fell 26% from the second quarter and 25% from a year earlier, to $34.1 million. The company said that accretion income from loans covered by loss-sharing agreements fell 41% from the second quarter, to $18.9 million, largely because of a decline in early payoffs and a lack of loan pool closings during the quarter.
State Bank reported a $3.3 million loss under noninterest income after recording $6.5 million in amortization tied to receivables for loss-sharing agreements. The company has been an aggressive acquirer of failed banks from the Federal Deposit Insurance Corp.
"We had timing issues related to accretion and the amortization of our indemnification asset that caused the contribution to earnings from our acquired portfolios to be the lowest since the inception of the company," Joe Evans, the company's chairman and chief executive, said in a press release Monday. "However, we remain positive about the cumulative profitability of our asset resolution business."
Noninterest expenses fell 12% from the second quarter and 9% from a year earlier, to $19.8 million.
The company's balance sheet compressed during the third quarter. Net loans decreased 4% from a quarter earlier, to $1.4 billion while deposits fell 2%, to $21.2 billion.
The loan-loss provision increased 29% from the second quarter and 68% from a year earlier, to $6.5 million because of a sizeable increase in coverage for loans covered by FDIC loss-sharing agreements.