National Cooperative Bank (NCB) reported earnings of $13.7 million in 2012 compared with $5.6 million in 2011. The improvement in NCB’s earnings in 2012 was driven by a number of factors, including improved asset quality, decreased funding costs and significantly increased profitability of loan sale activity at NCB’s thrift subsidiary, NCB, FSB.
Total assets as of December 31, 2012 declined to $1.7 billion at December 31, 2012, down from $1.9 billion at December 31, 2011. For the year, loans originated for sale, net of principal collections totaled $903.6 million (compared with $548.0 million in 2011) and loan sales totaled $1.4 billion (compared with $[1.0 billion in 2011). Total loans held for investment increased 1.7%. Gains on mortgage banking activities and loan sales increased 62.8% from 2011 due to the increased volume of sales and improved pricing in the secondary mortgage markets.
The performance of NCB’s loan portfolio continued to improve in 2012, with non-accrual loans declining 20.3%. In addition, the ratio of non-accrual loans to total assets declined to 3.3% at December 31, 2012 from 3.8% at December 31, 2011.
Deposits declined from $1.3 billion to $1.2 billion from December 31, 2011 to December 31, 2012 as NCB continues to reduce its holdings of higher cost brokered deposits. NCB also repaid nearly $100 million in senior debt obligations. As a result, NCB improved its overall cost of funding resulting in increased net interest margins and improved profitability.
Regulatory capital ratios at NCB’s wholly-owned thrift subsidiary, NCB, FSB, remained very strong in 2012. As of December 31, 2012, NCB, FSB’s core capital was 12.22% of adjusted total assets and its total risk-based capital was 15.15% of total risk-weighted assets.
Richard L. Reed
Chief Financial Officer