Profits fall at Crescent State Bank
Crescent Financial Corp. said earnings dropped 32 percent in the first quarter as it got hit by bad loans and a decline in net interest margin.
Crescent Financial (Nasdaq: CRFN), parent of Cary’s Crescent State Bank, said net income was $1 million in the quarter, or 10 cents per diluted share. A year earlier, it was $1.47 million, or 15 cents a share.
In a statement, CEO Mike Carlton said the earnings "did not meet our expectations."
Part of the reason was the cleanup of "several problem loans," Carlton said. Crescent set aside $806,000 in the quarter to deal with sour loans, more than twice the $359,000 it set aside in the first quarter of 2007 faxless payday advance. The company had $2.7 million in non-performing loans, or loans on which it isn’t collecting payments; net charge-offs, or loans the bank has written off as uncollectable, were $654,000.
Carlton said Crescent also got hurt from a falling net interest margin. That’s the difference between what a bank gets in interest from loans and investments and what it pays out in interest on deposits and borrowings.
Expressed as a percentage of total performing assets, that number was 3.27 percent in the quarter, down from 3.81 percent in the year-earlier period.
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