The corporate parent of VantageSouth Bank posted $1.7 million net income in the first quarter, reversing a net loss of a year ago, as the company benefited from improved business and its merger last year with East Carolina Bank.
“I think we put up a really solid, good quarter,” said Terry Earley, chief financial officer of Raleigh-based VantageSouth Bancshares. He added that the East Carolina Bank, which roughly doubled the size of the bank, “really transformed the company and our earnings profile.”
Net income amounted to 3 cents per share, compared to a loss of $1.2 million a year ago. However, year-to-year comparisons aren’t on an apples-to-apples basis because the acquisition of East Carolina Bank wasn’t completed until April 1 of last year.
In January, VantageSouth, which has 45 branches in central and eastern North Carolina, announced a merger with Yadkin Bank of Statesville that will create the largest community bank headquartered in North Carolina. The combined bank will have 70 branches and about $4 billion in assets and will be headquartered in Raleigh. The banking business will be based in Statesville.
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Net income in the first quarter was impacted by $1.6 million in after-tax expenses stemming from merger costs related to the Yadkin Bank deal and a restructuring. The latter includes the planned closings of four branches before the end of June – in Knightdale, Greenville, Ocean Isle Beach and China Grove – and the sale of a branch in New Bern, as well as a reduction of fewer than a dozen jobs through attrition and layoffs.
The upshot is that the bank will be “more efficient and more profitable,” said Earley, who added that about $10 million in annual costs have been shed.
In January the bank completed a $46.9 million private placement of its common stock. VantageSouth used that money to pay off its debt to the U.S. Treasury, money the bank received during the recession from the Troubled Asset Relief Program.
In the first quarter the bank paid $377,000 in dividends to the federal government – which will be its last dividend payment now that the debt has been paid off.
VantageSouth shares closed Wednesday at $6.07, down 12 cents. The stock is up 15 percent this year.