VantageSouth Bancshares (VSB) in Raleigh, N.C., reported an increase in its third-quarter profit on higher lending income, but still missed analysts' earnings projections.
The $2 billion-asset company earned $1.5 million in the quarter, up 15% from the third quarter of 2012, it announced Wednesday. Earnings per share of 3 cents were 5 cents lower than analysts polled by Bloomberg had expected.
VantageSouth's net interest income rose by 94%, to $19.9 million, after nearly doubling its asset base through its April merger with ECB Bancorp. Its net interest margin decreased by 10 basis points, to 4.39%. It made a $1.3 million provision for loan losses, up 18% from the year-prior period.
The bank's noninterest expense increased by 68%, to $18.7 million, largely due to increased headcount and occupancy costs following the merger with ECB.
VantageSouth's noninterest income was $4.5 million, up 36% from the same period in 2012. Its revenue from service charges and fees on deposit accounts rose by 189%, to $1.5 million, and income from government-backed Small Business Administration loans increased by 97%, to $1.5 million.
"Our SBA lending group notched its second highest quarterly revenue number in the history of our bank and continues to grow its origination of government-guaranteed, small business loans throughout the Southeast," said Chief Executive Scott Custer in the news release.
VantageSouth President and Chairman Dwight Utz announced his resignation in August. He had been CEO of ECB prior to its sale.
The bank said in August that it would raise $50 million to exit to Troubled Asset Relief Program.