NewDominion's 3rd-quarter profit tumbles 88%
NewDominion Bank reported Wednesday that third-quarter earnings fell 88 percent over the year, squeezed by rising provisions for loan losses and tight interest rate margins.
The Charlotte bank, which opened in January 2005, made about $119,000 in the third quarter. Chief executive Bradley Thompson said he was pleased the bank continued to post earnings “during one of the most challenging periods in recent banking history.”
Thompson said the bank was keeping tight controls on expenses. It increased reserves for potential loan losses to about $976,000, more than triple what it set aside a year ago, “due to declining economic conditions in the Carolinas.” It's also been hurt by narrowing net interest margins, which represent money made on the difference between rates paid to depositors and rates charged to borrowers.
Assets rose 54 percent over the year to $560 million. Loans and deposits also increased significantly, though Thompson said the bank had slowed making loans in the third quarter to preserve capital.
NewDominion is slated to be the second-biggest bank by assets headquartered in Charlotte, behind giant Bank of America Corp., after the impending sales of Wachovia Corp. and American Community Bancshares Inc.
The bank's nonperforming assets, or troubled loans, were a relatively low 1.08 percent of total loans, down over the quarter.
NewDominion secured commitments this year for $20 million in capital to fund growth. The bank is also studying the Treasury Department's capital purchase program, which lets banks sell preferred shares to the federal government.