TowneBank (TOWN) in Suffolk, Va., said that improved credit quality helped boost its first-quarter earnings 6.3% from a year earlier, to $11.1 million.
After TowneBank's $191,000 in preferred dividend payments, net income available to common shareholders increased 20%, to $10.9 million, or 31 cents a share, the $4.7 billion-asset company said in a news release Thursday.
TowneBank said that net chargeoffs fell 65% year over year, to $1.2 million. The provision for loan losses was $330,000 for the quarter, a drop of 91%, or $3.2 million, compared with the first quarter of 2013.
Total nonperforming assets declined to $52.5 million, or 1.10% of the bank's assets, from $64 million, or 1.46%, a year earlier.
TowneBank said growth in average earning assets of $338.8 million was offset by a decline of 28 basis points in its tax-equivalent net interest margin, to 3.44%. As a result, first-quarter net interest income was virtually unchanged from the year earlier, at $35.2 million.
Its first-quarter noninterest income, excluding gains or losses on investment securities, decreased 4.3% from a year ago, to $22.7 million. TowneBank cited a 35% decrease in residential mortgage banking income compared with the first quarter of 2013, due to lower loan production volumes.
Total assets rose 9.1% from a year ago, aided by a 3.5% expansion of TowneBank's loan portfolio, to $3.3 billion, during that timeframe. Likewise, total deposits rose 10.2%, to $3.7 billion. Noninterest deposits were up 7.7% to $1.1 billion, representing 29.6% of total deposits at March 31.