The results show significant improvement over the same reporting period last year of a net loss of $39,000 before TARP related expenses of $164,000 and a net loss of 8 cents per diluted common share.
The reported profit is another signal Greer State Bank is returning to a positive ledger after ridding itself of poor performing loans that caused the community bank to fall under a consent order. That order, agreed to by the bank, was ordered by state and federal banking regulators to improve its operations and strengthen its financial performance. Dennis Hennett, President and CEO of the bank, said pending unforeseen circumstances the company is near having the consent order rescinded.
“We believe we have turned the corner on loan losses,” Hennett said. “We did not have to put any money in the loan loss fund the last quarter. Our past dues is below one percent and that is very good.”
Hennett, in reporting the upbeat news, said the bank benefitted on an investment transaction and improving its loans portfolio by reducing outstanding loans and making more quality loans.
“The net profit for the first quarter of 2012 was aided by a net gain on an investment transaction. Without the gains of $1,301,000 and other extraordinary income and expense items, net operating income for the company would have been $507,000,” said Hennett.
“Furthermore, because of improving trends in loan quality and a reduction in total loans outstanding, the bank did not incur any loan loss provision expense in the first quarter of 2012. Legal expenses and other real estate expenses were also down significantly compared to the first quarter of 2011,” Hennett said.
Hennett, 69, was called out of retirement after former bank president and CEO Ken Harper resigned in late March 2011. Hennett was president of Greer State Bank since 1988 when it was founded and added CEO from 2004 to his retirement in 2008.
“The shareholders have been patient and understanding and our employees have been wonderful,” Hennett said. “It’s been three years since raises have been awarded to them.”
The bank also reported:
• total assets were $388 million, an increase of 1.1 percent from Dec. 31, 2011;
• total loans outstanding were $212 million, down 3.6 percent from ear end 2011;
• total deposits were $294 million, up 4.3 percent from year-end 2011.
Current trends in Greer State Bank’s past dues and non-accrual loans continue to improve. Non-accrual loans deceased from $10.4 million at Dec. 31, 2011 to $8.9 million on March 31. Delinquent loans over 30 days (excluding non-accrual loans) decreased from $5.3 million at Dec. 31, 2011 to $3.3 million on March 31.
According to the bank’s 10k filings with the Securities and Exchange Commission, Greer State Bank lost almost $8 million in 2010 and over $14 million in the past three years.