Diluted earnings per share for the current three-month period was 17 cents compared to diluted earnings per share of 13 cents for the prior year period, reflecting a 28 percent increase.
The percentage increase in earnings per share and the increase in net income were not comparable due to the issuance of 848,000 shares during the fourth quarter of 2005.
The increase in earnings resulted primarily from strong earning asset growth and was aided to a lesser degree by an improved net interest margin, the company said in a news release.
Earning assets, which include loans outstanding, investment securities and other interest earning assets, increased by more than $70 million over the past 12 months.
The net interest margin improved to 3.95 percent for the current three-month period, from 3.88 percent a year ago.
Net interest income increased by $892,000 or 27 percent from $3.3 million for the prior year quarter, to $4.2 million in the current quarter of 2006.
Noninterest income increased by $36,000 or 6 percent due primarily to increases in both deposit service charges and other deposit-related customer service fees.
Revenue from mortgage loan origination activities for the current quarter increased slightly as compared with the prior year period. Noninterest expenses increased by 19 percent from $2.6 million to $3.1 million primarily in those areas most impacted by franchise expansion such as personnel, occupancy, advertising and data processing. During the past year, the company opened one new full-service branch office, moved a branch office into a permanent building, opened a loan production office and took occupancy of a new operations facility.
The provision for loan losses was $164,000 during the current quarter compared with $303,000 for the prior year period.
For the six months ended June 30, Crescent reported net income of $1,986,000 or 33 cents per diluted share, compared with $1,294,000 or 26 cents per diluted share for the same six-month period last year.
Net interest income increased by $1.9 million or 30 percent from $6.4 million for the prior year period to $8.3 million for the current six-month period.
The net interest margin for the current six-month period was 4.02 percent compared to 3.86 percent for the prior year period. Noninterest income increased by $87,000 or 8 percent. Noninterest expenses increased by $937,000 or 19 percent. The provision for loan losses for the current six-month period was $434,000 compared with $507,000 for the prior year period.
Crescent Financial Corp. reported total assets as of June 30 of $471 million, reflecting a $78 million or 20 percent increase over total assets of $393 million on June 30, 2005.
Total net loans increased by $63 million or 21 percent from $297 million a year ago to $360 million as of June 30, 2006. Total deposits increased by $47 million or 14 percent from $323 million to $370 million. Total borrowings increased by 39 percent from $40 million to $56 million.
Total stockholders' equity grew by 53% from $28 million to $43 million as of June 30, due in large part to the equity offering in the fourth quarter of 2005.
"We are pleased with the financial results for both the second quarter and year to date," said Mike Carlton, President and CEO. "The increase in net income is especially gratifying in light of the additional expenses associated with the franchise expansion.
"Over the past 12 months, we have expanded the infrastructure substantially in order to position ourselves for continued growth. This past quarter further reflects our strategic commitment as we opened our tenth office.
"Additionally, we anticipate completing the recently announced merger with Port City Capital Bank of Wilmington, in the third quarter.
"We are confident that our long-term strategic objectives and unwavering commitment to customer service will position us well for continued growth and prosperity."
Crescent State Bank is a state- chartered bank operating 10 offices in Cary (two), Apex, Clayton, Holly Springs, Southern Pines, Pinehurst, Sanford, Garner and Raleigh.
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