The Virginian-Pilot
©
Monarch Financial Holdings Inc., helped by growth in its loan portfolio, a sharp drop in interest expense and improved credit quality, reported a 41 percent jump in third-quarter net income.
The Chesapeake-based parent of Monarch Bank earned $2.14 million for the July-through-September period, up from $1.51 million in the year-earlier quarter. Diluted earnings per share rose to 25 cents from 19 cents. The biggest source of its earnings continued to be mortgage-banking income, which totaled $15.01 million in the recent quarter. However, that was down 9 percent from the $16.47 million earned in the comparable period last year.
Monarch said the volume of loans closed by its Monarch Mortgage unit and related mortgage companies totaled $474 million, off 6 percent from the $504 million of loans closed in the year-earlier quarter.
Another key source of earnings, net interest income, rose 3 percent to $8.5 million, largely because of a lower cost of funds. Monarch reduced its provision for loan losses to $1.74 million from $3 million in last year's third quarter.
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Bank earnings
Can any bank reasonably estimate their loan loss reserves?
Extend and pretend :)
Not as good as it looks.
Remember this?
"The Chesapeake-based parent of Monarch Bank said it earned $2.14 million for the July-through-September period, up from $1.51 million in the year-earlier quarter." (That's an increase of $630,000....ok?)
Now this jewel:
"Monarch reduced its provision for loan losses to $1.74 million from $3 million in last year's third quarter."(That's an earnings increase of $1,260,000....ok?)
SO.....if Monarch had not reduced the provision for losses.....it would have had an earnings DECREASE of $630,000! Do the math.
Amazing....no?
I love the wild, wacky world of finance!