GREENVILLE, S.C., Oct. 24, 2019 /PRNewswire/ -- GrandSouth Bancorporation (GRRB:OTCQX), the holding company for GrandSouth Bank, today reported earnings of $1.8 million for the third quarter and $5.9 million year to date through September 30, 2019. Annualized returns on average assets were 0.82% and 0.94% for the same periods, respectively. For the quarter, this performance represents a 25.57% increase over the same period of 2018's earnings of $1.4 million. The increase in net income was primarily driven by a $1.2 million, or 12.76%, increase in net interest income and a $258 thousand, or 98.47%, increase in noninterest income, partially offset by a $776 thousand, or 11.40%, increase in noninterest expenses. Much of the noninterest expense increase during the period was a one-time expense related to the settlement of existing litigation. Year to date, the Company experienced a $1.4 million, or 31.44%, increase in net income over the same period in 2018. This increase was primarily driven by a $3.6 million, or 13.39%, increase in net interest income, partially offset by a $330 thousand, or 18.15%, increase in provision for loan losses and a $1.6 million, or 7.92%, increase in noninterest expense.
The Company finished the third quarter of 2019 with total assets of $888.1 million. This is a $23.7 million, or 2.74%, increase over the prior quarter and $111.9 million, or 14.42%, increase year to date. The main funding source for asset growth was interest bearing deposits, which increased $11.8 million, or 1.80%, for the quarter and $95.4 million, or 16.74%, year to date. Total gross loans ended the third quarter at $720.2 million, reflecting an increase of $29.0 million, or 4.20%, for the quarter and $56.9 million, or 8.58%, year to date.
Nonperforming assets ended the quarter at $3.8 million, or 0.42% of total assets, a decrease from 0.56% as of the prior quarter's end. Past due, but still accruing loans, net of the amounts guaranteed by the U.S. Government, increased to 0.07% of total gross loans as of quarter end, up slightly from 0.04% at June 30, 2019 and 0.32% at December 31, 2018. During the quarter, the Company moved two nonaccrual relationships out of the bank, recovering $37 thousand in lost interest. The Company also sold two assets acquired in the settlement of loans for a total of $600 thousand, recognizing a gain of $119 thousand. Asset quality remains a primary focus of the Company.
The specialty floor plan lending division continued to experience solid performance during the third quarter, finishing the period with $83.2 million in loans outstanding. The credit loss for the third quarter of 2019 was 1.18%, down from 2.01% in the prior quarter and 2.57% in the same quarter a year ago. This division continues to make a significant contribution to our earnings.
President and CEO JB Schwiers said "We are pleased to welcome J. Randolph (Randy) Potter as a new member of the Board of Directors of our Company. He brings exceptional leadership and community banking experience to our board. Randy co-founded and was Chief Executive Officer of Savannah River Banking Company and Summit Financial Corporation and previously served on the Board of Directors of three banks. He began his career as a Certified Public Accountant with KPMG.
Our team of experienced bankers continues to grow with the addition of Jill Waters and Chris Robinson in our Greenville Office. Jill has 30 years of experience and comes to us from BB&T where she served as a Commercial Relationship Manager. Chris has 12 years of experience and comes to us from South State Bank where he served as a Commercial Team Leader. Talented bankers who are empowered to serve our clients with local decision making and responsive service continue to be key to our success. It is our belief that recruiting and maintaining a team of proven performers positions GrandSouth to be the best choice for financing and cash management services for small businesses in South Carolina."
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About GrandSouth Bank: GrandSouth Bancorporation, the parent company of GrandSouth Bank, was founded in 1998 as a commercial bank. Since then it has grown into seven locations and offers a full array of commercial banking services for individuals and small businesses. The bank has over $888 million in assets as of September 30, 2019, including over $720 million in gross loans. Learn more at:
SOURCE GrandSouth Bancorporation