During the third quarter of 2013, the Company closed its branch in Vincent, Alabama and its Broadway Avenue branch in Sylacauga, Alabama, both of which were added with the FDIC-assisted acquisition of Frontier Bank in March 2013. The Company does not expect to experience a significant reduction in customer relationships and will serve these customers from other nearby locations. Also, the Company completed staffing reductions related to the Frontier acquisition that will result in a decrease of approximately $1.6 million from Frontier's pre-acquisition level of personnel expenses. Separately, the Company reduced Bank staffing by nine full-time equivalent employees, resulting in a one-time charge of $60,000 for severance for the third quarter of 2013, expected severance of $7,000 for the fourth quarter of 2013, and anticipates expense savings of approximately $460,000 per year related to this staffing reduction.
Third Quarter 2013 Results of Operations
The $1.3 million decrease in reported quarterly earnings for the third quarter of 2013 compared with the linked quarter resulted primarily from the following items:
- Decreased mortgage banking fees of $1.5 million;
- Decreased loan discount accretion from FDIC-acquired loans of $2.4 million, partially offset by decreased negative accretion of the FDIC loss-share receivable of $1.9 million;
- Increased legacy other real estate owned write-downs and foreclosed asset expenses of $387,000;
- Increased acquisition-related expenses of $132,000;
- Increased FDIC loss-share clawback expenses of $162,000; offset by
- Increased interest income on core loans and loans held for sale of $320,000;
- Decreased provision expense of $318,000; and
- Increased service charges on deposit accounts of $280,000.
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