M&F profit falls in 3Q
The parent company of Durham-based Mechanics and Farmers Bank reported a 28 percent drop in profits in the third quarter and posted a loss for the first nine months of the year.
But Randall Hall, the company’s chief financial officer, said bank officials remain optimistic they’ll be able to continue M&F’s record of profitability for the full year.
For the third quarter, the bank holding company posted a profit of $96,000. For the first nine months of the year, the company reported a loss of $19,000.
Hall said falling loan yields and lower average outstanding loan balances have created the greatest pressure on profits. However, he said the company is “beginning to build stronger loan pipelines” that should help boost loan income.
For the third quarter, the company reported a 4 percent drop in interest from loans and fees for a total of $2.66 million. However, its loan total was actually up almost 7 percent year-over-year to $187 million as of Sept. 30.
The bank has lowered the number past-due loans on its books. At the end of the third quarter, the bank had $2.9 million in past-due loans, compared with $10.46 million as of Dec. 31 last year.
It also has decreased its level of non-accruing loans from $8.7 million as of Dec. 31 to $4.5 million at the end of the third quarter.
“These improvements are the direct result of the efforts extended by our seasoned lenders working with borrowers who have suffered through the prolonged economic downturn,” M&F President and CEO Kim Saunders said in a news release.
The bank has also cut its costs. It saw decreases in non-interest expenses including benefits, information technology, FDIC insurance premiums and delivery expenses.