First Chatham Bank ended 2014 with positive earnings, reflecting overall gains made by other Georgia-based financial institutions, according to year-end financial reports.
In a letter to its shareholders last week, First Chatham reported $620,000 in core earnings during the fourth quarter of 2014, bringing the bank’s year-end pre-tax income to a little more than $2 million.
This is the 10th consecutive quarter of profitability for the community bank and brings the net income for fiscal year 2014 to $2.68 million. Ken Farrell, the bank’s interim CEO, said he was pleased with the numbers.
“These are real earnings in fiscal year 2014, so not only is the bank in Savannah proper doing well, but the other function that we’ve expanded into, Small Businness Administration lending, was a real big part of our bottom-line earnings last year,” he said.
In the previous fiscal year First Chatham was buoyed by the sale of its Kentucky-based lending subsidiary, Quadrant Financial. But this year the bank was able to post gains independently.
The development of an in-house SBA lending unit and progress in reducing non-performing assets by 15 percent helped the bank’s performance, Farrell said.
“I think we have a tremendous position in Savannah as being one of two remaining community banks,” he said. “We can compete effectively.”
First Chatham’s earnings report mirrors more positive news for Georgia’s 210 other state-based banks. According to the Georgia Bankers Association, the Peach State’s banks earned $2.57 billion during 2014, the highest amount since 2007 and the fourth consecutive positive year for earnings since the Recession.
The association said 87 percent of banks were profitable for the year, an improvement from last year’s 83 percent. Meanwhile, total loans of $203.3 billion were at their highest level since 2008.
“Improved family finances and better business conditions go hand in hand with better bank performance, and Georgia’s economy were markedly better in 2014 than just a few years ago,” said Joe Brannen, president and CEO of the Georgia Bankers Association.
The association noted other gains, including a growth of 6 percent in deposits, growing capital levels and a decrease in noncurrent loans for almost five straight years.
With an improving economy, regional consolidation continues to be a major trend in the banking industry. Notably, Ameris Bank closed its purchase of Savannah’s The Coastal Bank during 2014, while The Savannah Bank assumed the name of its new parent corporation, South State Bank.
“The biggest challenge community banks are facing, all of us, is the regulatory issues that we’re having to deal with,” Farrell said. “You do get economies of scale when you merge smaller banks, you get the cost savings and the efficiencies, however, there are provisions for smaller banks to help us compete with larger banks.”
Although First Chatham has no merger or acquisition plans presently, Farrell did not rule out the possibility entirely. He said looking forward, they will continue to expand their SBA lending division and focus on quality service.
“We’re just focused on continuing to do well for our customers and improve our performance,” he said. “(Our) goal is to be an independent community bank in Savannah.”