Magazine article American Banker

Despite Jump, Profits Thin at Kalamazoo's FSB

Magazine article American Banker

Despite Jump, Profits Thin at Kalamazoo's FSB

Article excerpt

Even a 212% profit jump brought only marginal profitability to FSB Financial Corp. of Kalamazoo, Mich., in the second quarter.

The $170 million-asset company earned $102,570, for a 0.25% return on assets.

FSB attributed the rise, from $33,000 a year earlier, to beefed-up commercial loans and mortgages. Net income for the first six months was up 68% to $152,723.

"The six months and the three months are up principally because net interest income is up," said Doran K. Stanley, executive vice president and chief financial officer. "The reason net interest income is up is we've increased our loan portfolio.

"In 1993 and 1994, we were in the cycle of low interest rates," he said. "We weren't putting low-yielding loans into the portfolio. As a consequence, we ended up with a lot of liquidity and put it into short-term securities."

FSB's earnings were $255,000 at June 30, 1993, as it benefited from gains on loan sales to the secondary market. …

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