For example, Cardinal Bank, which posted a 46 percent rise to $8.6 million in net income, reduced provisions from $3.5 million in the third quarter of 2010 to $2.9 million this time around. Troubled loans represent 0.59 percent of total assets at the Tysons Corner-based bank, which ended the quarter with $271,000 in loans 30 or more days past due.
Though nonperforming assets at Sandy Spring Bank in Olney rose from $76.5 million in the second quarter to $82.8 million last quarter, they’re still down roughly 11 percent from the same period in 2010. One $13.6 million commercial real estate loan pushed the level of troubled assets higher.
Aside from that blip on the balance sheet, Sandy Spring’s rate of charge-offs continued to improve. The bank, as a result, reported a provision credit of $3.5 million, compared with a charge of $2.5 million a year ago, as it shifted money from reserves back into earnings. Profits grew 33 percent to $11.3 million.
“The decrease in credit costs for the quarter reflects our declining levels of charge-offs and is a product of our aggressive efforts to address problem loan issues early in the current credit cycle,” said Sandy Spring chief executive Daniel Schrider, in the earnings release. He pointed out the bank also originated $167 million in commercial loans for the first nine months of the year “despite fierce competition in the marketplace.”
Sandy Spring was one of several area banks to report an increase in lending in the third quarter. Virginia Heritage Bank of Fairfax, for instance, grew its book 12 percent to $412 million in loans, while McLean-based Capital One Financial’s loan balances rose $987 million to $130 billion loans.
EagleBank’s 24 percent increase to $1.96 billion in total loans helped lift third-quarter profits to $6.5 million, up 36 percent from a year ago. The bank also benefited from participation in the Small Business Lending Fund, which lowered dividends on the preferred stock issued under the Troubled Asset Relief Program from 5 percent to 1 percent. As a result, net income available to shareholders jumped 43 percent to $6.3 million.
Even in instances where banks reported lower profits, poor asset quality was not the culprit. Germantown-based OBA Bank, for instance, posted a 65 percent decline to $88,000 in profit attributable to the implementation of its equity incentive plan, new hires and salary increases.