The Charlotte-based parent company of Park Sterling Bank said Thursday its first-quarter profits fell 28 percent compared with the same period last year, as expenses rose in connection with its purchase of Virginia's First Capital Bancorp.
Park Sterling Corp. reported net income of $2.7 million compared with $3.8 million a year earlier, as it recorded roughly $5.2 million in merger-related costs associated with the First Capital acquisition. Earnings excluding those costs were 12 cents per share, above the 8 cents expected by analysts, according to Bloomberg.
The First Capital merger, completed in the first quarter, marks the fourth acquisition for Park Sterling since it went public in 2010.
Under CEO Jim Cherry, Park Sterling has pushed forward with a strategy of becoming a multistate community bank. Following the First Capital deal, which added to Park Sterling’s existing presence in Virginia, Park Sterling has 57 branches across four states.
Park Sterling said its adjusted net income, which excludes merger costs and other items, was a record $6.2 million in the latest quarter.
The First Capital purchase also helped boost Park Sterling’s assets in the latest quarter. Assets now total $3.2 billion, up 32 percent from a year ago.
The rise in assets helped fuel higher revenue compared with the same period last year. But Park Sterling’s net interest margin, a key measure of banks’ profitability, declined to 3.78 percent from 3.84 percent.
Low interest rates, which the Federal Reserve cut to near zero in 2008 as the U.S. weathered the recession, continue to pressure banks’ net interest margins.
In the Charlotte metropolitan area, Park Sterling is the largest community bank based on market share by deposits, according to the most recent federal data.