Profits down at 3 community banks

Three Triangle community banks posted quarterly earnings that were significantly lower than a year ago, reflecting a struggling economy and a difficult lending environment.

All three banks -- Capital Bank and North State Bank in Raleigh, and Crescent State Bank in Cary -- managed to remain profitable.

Community banks here are on a more stable footing than banks elsewhere, in part because the local real estate market didn't overheat.

Here's a rundown of the banks' quarterly results:

CAPITAL BANK: Third-quarter profit fell to $2 million, or 18 cents a share. That's 27 percent less than a year ago.

A key factor, said CEO Grant Yarber, was a narrowing of the gap between the interest rates the bank pays on deposits and the interest rates it receives on loans.

What's more, the bank's loan charge-offs rose to $653,000, from $234,000, the result of an uncollectible loan to a used car dealer, Yarber said. Still, past due loans as a percentage of total loans declined to 0.75 percent, versus 1.23 percent a year ago.

"Our asset quality has continually improved in the sluggish economy," Yarber said.

Capital has 27 branches in the state and $1.6 billion in assets.

CRESCENT: Profit fell to $746,000, or 8 cents per share, half of what it was a year ago.

Nonperforming assets totaled $4.6 million, up from $2.6 million. CEO Michael Carlton said the increase was due to several problem real estate loans along the coast. "Given the economic environment we are operating in, we are very pleased to be reporting a significant profit," Carlton said.

Crescent also announced that it obtained $7.5 million in capital during the quarter in a subordinated debt deal with United Community Bank of Georgia.

Crescent has 13 branches and $955.5 million in assets.

NORTH STATE: Profit fell to $586,000 in the third quarter, down 37 percent from a year ago.

The lower prime rate hurt the bank's performance because 38 percent of the bank's loans are tied to the prime, CEO Larry Barbour said.

In addition, expenses rose 29 percent because of the bank's expansion -- including branches that opened in January in Wilmington and downtown Raleigh.

The bank's ratio of nonperforming loans to total loans jumped from virtually nothing a year ago -- 0.03 percent -- to 0.98 percent. The bulk of that came from a single loan to a professional who died unexpectedly, Barbour said.

North State has seven branches in Wake and New Hanover counties. It has $633.4 million in assets.