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Mark Freerks
Community Bank of Broward improved its loan quality in the second quarter.
Community Bank of Broward registered a modest decline in its second quarter profit, but it shed a quarter of its problem loans.
The Weston-based bank earned $455,000 in the second quarter, down from earnings of $481,000 in the first quarter. One big reason why is that it took a $405,000 expense to reserve for future loan losses, compared to a $175,000 expense in the first quarter.
The bank's net interest income edged up slightly to $4.4 million in the second quarter.
Community Bank of Broward had $16.2 million in noncurrent loans, or 4.3 percent of total loans, on June 30, a significant improvement from $21.9 million in noncurrent loans, or 5.82 percent, on March 31. However, its holdings of repossessed property increased to $4.7 million, from $3.9 million, over that time.
The bank held $6.3 million in reserve for future loan losses to cover 39 percent of its noncurrent loans on June 30.
"Substantially all of our loans in non-accrual status continue to make their payments on a timely basis," Community Bank of Broward President and CEO Bruce M. Keir stated in a letter to shareholders. "Be assured that we will continue or heightened focus on improving asset quality going forward for as long as it takes."
He added that the reduced expenses from non-performing assets should improve the bank's profit outlook fro the remainder of the year.
Community Bank of Broward was the 23rd largest bank based in South Florida on March 31 with $488 million in assets. By June 30, it was down to $469 million in assets.
The bank's deposits declined to $403 million on June 30, from $419 million on March 31. Its loans increased to $371 million, from $369 million, over that time.
"We continue to have challenges in growing our loan portfolio as new production is only replacing the non-performing loans we have eliminated from the portfolio," Keir stated. "I am pleased to say that our loan pipeline is the largest it has been in several years, so I anticipate greater volumes during the third and fourth quarters of this year."
Brian Bandell covers banking, finance, health care and education. Get the latest banking industry news here.
