Updated: Profit jumps at Mount Pleasant-based bank owner Southcoast Financial
Second-quarter earnings at Southcoast Community Bank’s parent jumped more than a third from a year ago, not including a big tax benefit that magnified the gain.
Southcoast Financial Corp. said its core earnings totaled $617,000, up 36 percent from the 2012 March-June period.
After factoring in the $6.4 million tax benefit, the profit for the latest quarter ballooned to $7 million.
Shares of the Mount Pleasant-based company rose 10 percent to close at $5.63 on Thursday. Trading volume was heavier than normal. The stock was one of the day’s top 10 gainers among Nasdaq issues.
The tax benefit, which Southcoast can use to reduce future income tax liabilities, stemmed from loan write-offs in 2011. The bank owner had to postpone claiming it until it showed a sustainable run of profits. Southcoast has been in the black for six straight quarters.
In the latest reporting period, Southcoast showed gains in deposits and in its net margin, which is the spread between its interest-bearing assets, such as loans, and what it pays depositors.
Also, bank-owned foreclosures, bad loans and other so-called nonperforming assets were cut nearly in half from a year ago to 3.53 percent of total assets.
“The 2013 results reflect the continued improvement of our net interest margin, continued decreased levels of nonperforming assets, and an improved deposit mix,” said L. Wayne Pearson, Southcoast’s chairman and chief executive officer. “These items are helping us achieve our goals of increased core earnings and a strong capital base.”
Southcoast has 10 branches.