Park Sterling Corp. on Friday announced its first-ever quarterly dividend as it also reported record second-quarter profit, which rose 418 percent from a year ago.
Park Sterling, the parent company of Charlotte’s largest community bank, said its merger last year with Gastonia-based Citizens South Banking Corp. contributed to the big boost in earnings.
Profit rose to $3.5 million, or 8 cents a share, from $678,000, or 2 cents a share a year ago.
Interest income increased 73 percent, to $20.1 million. Noninterest income grew 60 percent, to $4.1 million.
For the first time since it went public in August 2010, Park Sterling declared a quarterly dividend. It will be 2 cents per share and payable in the third quarter.
CEO James Cherry, in a phone interview, called the dividend “an expression of our confidence in the strength and the sustainability of our core earnings and of our financial position.
“If you’re going to pay a dividend, you want to know that you are going to be in a position to continue to do that.”
Bank officials on Friday said they are interested in acquiring or merging with additional banks. Park Sterling has lifted a self-imposed moratorium on mergers and acquisitions that was in place while it completed the Citizens South purchase. The $77 million deal doubled Park Sterling’s assets, which are now $2 billion.
Park Sterling has a “readiness to pursue M&A (mergers and acquisitions) activities. We certainly continue to look for others,” Chief Financial Officer David Gaines said during an earnings call.
While the bank’s loans, thanks to the Citizens South merger, are up from a year ago, they fell from the first quarter. Commercial loans dropped 2 percent, to $900 million. Consumer loans, which include home mortgages, also fell 2 percent, to $1.3 billion.
Deposits rose 89 percent, to $1.6 billion, from a year ago but fell 0.1 percent from the first quarter.
Noninterest expenses increased 56 percent, to $17 million, from a year ago as the bank paid more in salaries and other costs in the wake of the merger.
In other news, court records show that a lawsuit Park Sterling filed against Charlotte law firm Wallace & Pittman was voluntarily dismissed last week. According to legal documents, Park Sterling had sued to recover $336,600 it said it initially reimbursed the law firm after a fraudulent wire transfer sent the firm’s money to Russia.
Park Sterling shares rose 1.7 percent Friday to $6.43.
Staff researcher Maria David contributed.
Roberts: 704-358-5248 Twitter: @DeonERoberts
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