Profits at State Bank Financial Corp. in Atlanta said its second-quarter profit fell 10% from the same period last year as gains in interest income were offset by higher expenses and an increase in its loan-loss provision.
The $2.8 billion-asset company said late Monday that it earned $8.6 million in the quarter that ended June 30, down from $9.6 million in last year's second quarter. On a per-share basis, State Bank earned 26 cents, a penny short of estimates of analysts polled by Thomson Reuters.
State Bank said that its net interest income rose 3% year over year, to $30.6 million, thanks largely to a 35% decline in its interest expense. However, the company's noninterest expense, which includes salaries and employee benefits, jumped nearly 23% year over year, to $23.4 million. Meanwhile, State Bank increased its provision for loan losses by nearly 200% from the same period last year, to just over $2 million.
Founded in 2005, State Bank has grown into one of Georgia's largest community banking companies primarily by acquiring failed banks. The bulk of its loans are loans acquired in the five failed-bank deals, but the company continues to grow its portfolio of loans not covered by loss-sharing agreements with the Federal Deposit Insurance Corp.
At June 30, its portfolio of noncovered loans totaled $539 million, an increase of roughly 60% since Dec. 31.
