Gateway Financial Holdings Inc. of Virginia Beach said Thursday that its first-quarter income climbed 24 percent, largely from gains on the sale of securities and greater income from its insurance unit.
Meanwhile, the Norfolk-based parent of Bank of the Commonwealth reported that its income for the January-through-March quarter fell 15 percent because of expansion-related expenses and a narrower spread between the yield on its loans and the cost of its funds.
Commonwealth Bankshares Inc. said it earned $2.36 million in the recent quarter, compared with $2.76 million in the year-earlier period. Its earnings per share dropped to 34 cents from 40 cents.
Both companies blamed the rapid decline in short-term interest rates for putting pressure on their net interest income. Both also reported sharp increases in troubled loans but insisted that their overall asset quality remained sound.
Gateway, the parent of Gateway Bank & Trust, said it earned $3.12 million for the January-through-March period, compared with $2.51 million in the year-earlier quarter. Earnings per share fell to 20 cents from 22 cents because it had more shares outstanding during the recent quarter.
Gateway's net interest income, its biggest source of earnings, rose 26 percent to $12.6 million. Meanwhile, its earnings from service charges, sales of insurance and other sources of non-interest income jumped 48 percent to $6.88 million, largely because of gains from securities sales.
At the end of March, its non-performing loans stood at $6.6 million, nearly double the $3.4 million total a year earlier, Gateway said. Approximately 70 percent of its non-performing loans are on the Outer Banks, it said.
Gateway's share price rose 18 cents to close at $10.14.
Meanwhile, Commonwealth Bankshares said its net interest income for the recent quarter remained flat at $8.08 million, while income from non-interest sources rose 2 percent to $1.22 million.
Commonwealth said its nonperforming assets jumped to $9.3 million at the end of March, more than three times its year-earlier total of $2.9 million. These consisted of $7.2 million in loans and $2.1 million of foreclosed real estate.
Commonwealth's share price fell 29 cents Thursday to close at $15.81.
Tom Shean, (757) 446-2379, tom.shean@pilotonline.com
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commomwealth loans!!!! might be x for a new board and president
mr. woodard stated nonperforming loans increased $7.2 million dollars from last year..not 2 worry the loans r secured by good real estate...what is good real estate in todays market??what about the $7.5 millon dollar loan the bank made for the "Granby Towers"....is that good real estate..?keep opening those new branches ...maybe someone will take the bank over...hope!!hope!!!never happen the president has a buyout no take over...