CCB Bankshares Inc. recently announced its unaudited results of operations for the first quarter of 2016.

Earnings

According to a press release, CCB Bankshares Inc. has reported net earnings of $269,576 to common shareholders after preferred stock dividends of $9,000 for the first quarter of 2016. Earnings per share on a basic and dilutive basis were 18 cents and return on average assets was .59 percent, according to a release from CCB Bankshares Inc.

For the first quarter of 2015, the bank reported net income of $205,758 after preferred stock dividends of $10,000 or 14 cents per share on a basic and diluted basis, which represents a 31 percent increase or $64,000 year-over year.

Regarding performance for the first quarter, James R. Black, president and CEO, said, “We had a solid start to the year. First quarter net income was up 31 percent and the loan pipeline is healthy. We had a successful subordinated debt offering during the quarter and are making further progress on expanding our market presence in northern North Carolina. We expect continued growth for the remainder of the year and are focused on improving our overall efficiency.”

Net interest income, which includes the effect of $29,000 in interest expense paid on subordinated debt issued by the company in February 2016, increased by $207,748 or 14.4 percent from the first quarter of 2015. The net interest margin for the first quarter of 2016 was 3.87 percent compared to 3.67 percent for the same period of 2015.

The yield on earning assets was 4.40 percent for the first quarter of 2016, compared to 4.39 percent for the first quarter of 2015. The cost of funds for the first quarter of 2016 was .76 percent, an 18 basis point reduction from the first quarter of 2015.

This is attributed to repricing the certificate of deposit portfolio lower as well as diversification of funding through judicious use of market-priced deposits. The weighted cost of funds for the first quarter of 2016 was .54 percent, compared to .78 percent for the first quarter of 2015, augmented by a 9 percent increase in demand deposits, according to the release.

Non-interest income totaled $198,165 for the first quarter of 2016, a decrease of $2,848 or 1.4 percent from the first quarter of 2015, at $201,013.

Service charge income at March 31 was $47,000 compared to $54,000 at March 31, 2015. Higher balances maintained in accounts as a result of relationship pricing as well as continued regulatory pressures on imposition of service charges contributed to the decrease year-over-year.

First quarter fee income for placement of mortgages in the secondary market was $12,723, compared to $11,939 for the first quarter of 2015. The mortgage pipeline is steady and the Company’s flexibility allows it to retain a select group of loans for its own portfolio, which may result in lower fee income in the short run but higher interest income in the long run.

Non-interest expense for the first quarter of 2016 was $1,449,209, an increase of $111,417 or 8.3 percent from the first quarter of 2015. Several broad expense categories have increased year-over-year, including salary expense, which is 9.9 percent higher as a result of the opening of the Louisburg, N.C. branch in the fourth quarter of 2015 and the addition of several business development officers and support staff in North Carolina.

Data processing expenses decreased by 15.8 percent year over year due to even closer management of core functions and products. There were no valuation write downs to other real estate owned during the first quarter of 2016 or 2015, and no provision expense was required.

As the levels of other real estate owned decrease, so too do the accompanying legal and collection fees and the expenses to carry the properties. The efficiency ratio for the first quarter of 2016 was 78.4 percent compared to 80.8 percent one year ago.

Growth

“At March 31, total assets were $186.3 million, up $13.7 million, or 7.9 percent from March 31, 2015. Gross loans at March 31, 2016 were $154.6 million, an increase of $21.2 million or 15.9 percent from March 31, 2015. Net loans at March 31, 2016 were $152.6 million, compared to $149.1 million at December 31, 2015, an increase of $3.5 million despite a combination of unexpected and anticipated annual line payoffs,” stated the release.

“Loan demand throughout the markets has shown modest improvement. The company remains committed to profitable growth without compromise of asset quality, liquidity, or interest rate risk. Deposits totaled $156.9 million, an increase of $9.6 million or 6.5 percent over March 31, 2015 and $3.4 million or 2.2 percent over December 31, 2015. Over the same comparable period, noninterest bearing demand deposits increased $8.2 million or 30 percent, interest-bearing checking and savings deposits increased $17.2 million or 43.2 percent, and time deposits decreased 5 percent.”