Second-quarter net income for Seacoast Commerce Banc Holdings, the parent company for Seacoast Commerce Bank, rose nearly a $1 million since last year, to $1.4 million, the company’s 20th consecutive quarterly profit.
The bank’s assets, loans, Small Business Administration loans held for sale and deposits all hit record numbers in the quarter ending June 30, the company reported. Seacoast had $463.5 million in assets, $377 million in loans, $256.4 million in SBA loans held for sale and $417.5 million in deposits.
In its SBA loan division, loan production was up $25 million since last year, to $102.6 million, but loan sales were down about $18 million, to $30 million. Seacoast said the drop in SBA loan sales was part of a growth strategy based around holding onto more saleable loans to create more consistent spread income.
“With year-over-year loan, deposit, and asset growth all meaningful, we are seeing the benefits of our ‘hold strategy,’” CEO Richard M. Sanborn said. “This growth is driving our income statement results where we had a 30% increase in core net-interest income, before any gain-on-sale of loans income. We are also mindful of expected interest rate increases, which, with our balance sheet structure, should prove to be another advantage to our strategy.”
Sanborn said the interest rates for most of Seacoast’s loan are adjustable quarterly, allowing it to benefit from rising rates.