The fragile economic recovery that the region's youngest bank began sensing around mid-2011 translated into record earnings.
The holding company of Charleston-based Harbor National Bank posted a profit of $1.34 million last year, a steep jump from the $60,673 gain for 2010.
The bottom line was helped by growing confidence in the local economy, especially among small-business borrowers and the fact that the bank had to set aside less money to offset losses from soured loans, said Charles F. Rivers III, president and chief executive.
"We've gotten past most of the credit issues," Rivers said Tuesday. "We had to put less in our reserves and had fewer charge-offs. That, coupled with our growth, helped us to have a pretty good year."
The six-year-old lender said its total assets last year increased 8.3 percent to $253.9 million, including a 3.3 percent gain in loans to $208 million. Deposits rose almost 7 percent to about $211 million.
The bank said it has beefed up its previously announced expansion plans by opening a mortgage division. The new seven-person office is at Houston Northcutt and Coleman boulevards, near Harbor National's existing Mount Pleasant retail branch. The bank sees an opportunity to grow that business as local home sales pick back up, Rivers said
"With interest rates as being as low as they are, there's a good bit of refinancing going on, but we're also seeing some purchase mortgages coming about," he said.
At the same time, some of the bigger lenders have scaled back their mortgage operations to concentrate on working through their residential foreclosures.
"The market has constricted somewhat, and that's pushing some consumers back to community banks for their mortgages," Rivers said.
Last summer, privately held Harbor National took its brick-and-mortar expansion plans off ice, saying the fog of the last recession was finally starting to lift. It remains on track to enter the James Island market this summer with a branch that is under construction at Folly Road and Crosscreek Drive. Also, the bank is still actively looking at sites in Summerville for a fifth branch.