Charlotte-based NewDominion Bank reported Thursday it earned about $121,000 in the second quarter, down 87 percent from a year ago.
The bank more than tripled its provisions for future possible losses, as its amount of troubled loans continued to grow. NewDominion recorded nonperforming assets, or troubled loans, of $5.8 million, or 1.35 percent of total loans. That's up from $2.4 million, or 0.8 percent of total loans, a year ago. The majority of the bank's troubled loans came from its strategic partners business, which involves the bank's buying and selling loans with other banks outside its primary markets.
The bank also saw a sharp decline in non-interest income, to $181,000 from $1.2 million a year ago. The bank blamed three factors: the closing of its mortgage unit in Raleigh last summer, the decline in service charge income, and higher losses in its securities portfolio.
Chief Executive Bradley Thompson said the bank would plan to grow more conservatively for the rest of the year and would continue to tightly manage expenses.
“We are pleased that we have remained profitable during a period of low interest-rate margins and rising credit quality challenges,” Thompson added.
The bank's net interest income rose 12 percent from a year ago, to $3.5 million. Its assets, loans and deposits increased substantially. Assets rose 47 percent over the year, to $505 million.
By assets, NewDominion is the fourth-largest bank headquartered in Charlotte. Christina Rexrode
Parlier no longer with American Community
In a filing Wednesday with the Securities and Exchange Commission, American Community Bancshares Inc. announced the termination of its chief credit officer, Harry Parlier. The bank did not provide further details.
Last week, the Charlotte bank reported second-quarter earnings of $484,000, down from $1.2 million the year before. It blamed the compression of its net interest margin, which means that, due to rate cuts by the Federal Reserve, the bank is earning less money on the loans it issues. By assets, American Community is the third-largest bank headquartered in Charlotte. Christina Rexrode