Net interest income improved to $4.17 million for the third quarter 2016 from $4.11 million for the same quarter 2015. Net Interest income increased by 4.4% to $12.48 million for the first nine months of 2016 compared to $11.95 million for the same period in 2015. The $529,000 increase in net interest income resulted primarily from a 7.3% growth in net loans to $309 million at September 30, 2016 compared to $288 million for September 30, 2015. Net loans have increased $10.3 million since year end for an annualized growth rate of 3.45%.
The company's cost of funds remained stable at .39% for the fourth consecutive quarter and reflected an improvement of .07% for the first nine months of 2016 compared to .46% from the same period in 2015. The improvement in cost of funds was positively impacted by $6 million of growth in non-interest bearing deposits to $97 million at September 30, 2016 compared to $91 million at September 30, 2015. Total deposits of $352 million as of September 30, 2016 declined from $387 million on September 30, 2015, primarily due to the 2015 figure being impacted by short term temporary deposits of approximately $25 million from core customers.
FirstAtlantic's asset quality measures remained strong through the third quarter of 2016 with the ratio of non-performing assets to total assets of .35% compared to .81% in September 2015. Net loan charge-offs for the first nine months of 2016 were $99,000 or .04% of average loans compared to $118,000 or .06% of average loans for the same period in 2015. The allowance for loan losses of approximately $2.2 million was the same for both September 30, 2016 and 2015. Due to improvements in loan quality, the reserve strengthened relative to non-performing loans, increasing to 203% of nonperforming loans at September 30, 2016 compared to 74% of non-performing loans for the same period in 2015.
Non-interest income for the third quarter was $322,000 compared to $464,000 for the same quarter in 2015. The decline in non-interest income is due to the previous year's third quarter being positively impacted by $124,000 of pre-tax non-recurring gains on sale of a portfolio loan and other real estate. Non-interest income was $1.4 million for the first nine months of 2016 compared to $1.8 million for the same period in 2015. The year to date decline in non-interest income results from the previous year's amounts being positively impacted by $855,000 of pre-tax non-recurring gains on sales of a portfolio loan, investments, and other real estate. The current year's non-interest income was positively impacted by a lesser amount of $370,000 from pre-tax gains on sale of securities and other real estate.
Non-interest expense for the third quarter of both 2016 and 2015 was $3.0 million. Non-interest expense was $9.2 million for the first nine months of 2016 compared to $8.9 million for the same period in 2015.
Equity of the company increased to $61.0 million at September 30, 2016 compared to $57.4 million at September 30, 2015.
Earlier in October of this year, FirstAtlantic paid its third consecutive quarterly dividend of $0.03 per share. The annualized amount of $0.12 per share represents a 20% increase over the annual dividend of $0.10 per share paid in 2015.
"We are very pleased to share our third quarter results", stated FirstAtlantic Bank President & CEO Mitchell W. Hunt, Jr. "FirstAtlantic is performing well as our team of dedicated bankers continues to build long term relationships with our customers."
The third quarter financial statements, shareholder letters, and other communications are available through www.otcmarkets.com under the symbol FFHD.
About FirstAtlantic Financial Holdings, Inc.:
FirstAtlantic Financial Holdings, Inc. is the holding company for FirstAtlantic Bank, which is a full service community bank, headquartered in Jacksonville, Florida. FirstAtlantic has approximately $437 million in assets and eight financial centers located in Jacksonville, Orange Park, St. Augustine and Ponte Vedra Beach. FirstAtlantic Bank (www.bankfirstatlantic.com) is dedicated to serving businesses, professionals, and consumers while offering a full array of banking services. FirstAtlantic Bank has earned a 5-Star Rating from BauerFinancial, Inc., the nation's leading bank rating firm. FirstAtlantic Financial Holdings, Inc. has received a 3-Star Rating from Morningstar (available at otcmarkets.com).
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SOURCE FirstAtlantic Financial Holdings, Inc.