Spartanburg-based CAB Financial Corp. reported Wednesday, Nov. 1, its banking subsidiary Carolina Alliance Bank’s earnings decreased more than 22 percent during the third quarter.
The bank’s net income fell to $934,000 during the quarter, compared with $1.2 million during the same quarter ended Sept. 30, 2016.
For the year, Carolina Alliance’s net income was $3 million, a more than 3 percent decrease compared with $3.1 million during the same nine-month period of the previous year.
The bank said the decrease was due to an increase in its provision for loan losses and decreased net interest income from net interest margin compression, which was partially offset by increased non-interest income and decreased income tax expense.
But Carolina Alliance’s President and CEO John Kimberly expressed optimism as he said the bank’s gross loans and leases increased more than 8 percent to $515.3 million during the third quarter, compared with $475.6 million during the same quarter of 2016.
The bank reported its assets increased almost 9 percent to $685.9 million during the quarter, compared with $626.4 million during the same quarter of the past year.
Its total deposits increased nearly 8 percent to $557.3 million for the quarter, compared with $517.6 million during the same quarter of 2016.
“Growth in both loans and deposits was strong in the third quarter, and we are optimistic this will continue throughout the year,” Kimberly said in a statement. “Managing net interest margin compression has never been more challenging or more critical to the bank’s success. Fortunately, the slightly lower net interest income has been somewhat offset by increased non-interest income this year.”
Carolina Alliance said its book value per common share was $10.69 as of Sept. 30, compared with $10.34 as of the same date in 2016.
The bank said its non-performing assets for the quarter were $3.2 million, compared with $2.5 million during the same quarter a year ago.
Its allowance for loan and lease losses was $5.4 million for the quarter.
Terry Cash, chairman of Carolina Alliance and CAB Financial Corp., said the bank issued a 5 percent stock dividend in September.
The bank said it continued to be “well capitalized,” the highest classification used by regulators to describe an institution’s capital strength.
Carolina Alliance reorganized under its new holding company on Oct. 23. CAB Financial Corp.’s common stock is now quoted on the OTCQX Market under the “CABF” symbol, according to John Poole, CEO of the corporation and the bank’s founder.
“We believe this structure will provide added financial and operational flexibility for the future,” Poole said in a statement.