CertusBank in Greenville, S.C., continues to lose money, largely because of high expenses.
The $1.6 billion-asset company lost $9 million in the first quarter, according to a call report filed with the Federal Deposit Insurance Corp. It was the tenth consecutive quarterly loss for Certus, which
Overall expenses fell, but still outweighed the bank's revenue. Noninterest expense fell 9% from a year earlier, to $32.6 million, due largely to a sizeable decline in costs tied to loss-sharing agreements with the FDIC for failed-bank purchases. Still, the bank's noninterest expense in the quarter was more than double the $13.5 million average of nearly 100 banks with $1 billion to $2 billion in assets analyzed by American Banker.
The bank pledged in January to reduce costs by closing branches and cutting salaries, but those costs remained elevated. Salaries and benefits rose 6%, to $16.8 million, and costs for premises and equipment rose 58%, to $5.2 million. The bank did cut 80 full-time workers in the last year, including 56 in the first quarter.
Certus' revenue was stronger than that of a year earlier. Net interest income rose 6%, to $16 million, as the company was able to cut its deposit costs. Noninterest income jumped 21%, to $8 million, on increased servicing fees and larger gains from selling securities, loans and foreclosed properties.
The bank recorded $1.4 million in net chargeoffs, compared to $4.5 million a year earlier. Its loan-loss provision more than doubled, to $1.2 million.
Certus remains well-capitalized, but its Tier 1 capital ratio of 8.08% remains below the 10% level required by its charter. Certus received a national shelf charter in 2011 to buy failed banks.
The bank's board hired John Poelker as interim chief executive last month after firing three of the bank's founders; a fourth founder resigned on March 31.
The three ousted executives Milton Jones, Walter Davis and Angela Webb subsequently
Paul Davis contributed to this report.
