GREENVILLE, SC, July 24, 2020 GrandSouth Bancorporation (GRRB:OTCQX), the holding company for GrandSouth Bank (the “Company”), today reported earnings of $1.6 million for the quarter ending June 30, 2020, compared to earnings of $2.0 million for the same period in 2019. During the first and second quarter of 2020, results were negatively affected by the decision to further bolster the allowance for loan losses, increasing the reserve to 1.42% of loans at the end of the first quarter and then further to 1.50% of loans excluding Small Business Administration (“SBA”) Payroll Protection Plan (“PPP”) loans at the end of the second quarter. Our credit metrics continue to look strong at the end of the second quarter, but we believe the higher reserve is necessary should economic conditions remain weak for an extended period of time.
Nonperforming assets ended the quarter at $3.0 million, or 0.31% of total assets, down from 0.35% as of March 31, 2020 and 0.42% as of December 31, 2019. Past due, but still accruing loans, net of the amounts guaranteed by the U.S. Government continued to improve, ending the quarter at 0.004% as a percentage of total assets for the quarter ended June 30, 2020, compared to 0.007% at March 31, 2020 and 0.008% at December 31, 2019.
Total assets at the end of the second quarter were $992.3 million. This is an $80.7 million, or 8.85%, increase in total assets since December 31, 2019 and a $67.2 million, or 7.27%, increase since March 31, 2020. The main funding source supporting asset growth was noninterest bearing deposits, which increased $54.1 million, or 39.92%, and $51.2 million, or 37.05%, for the quarter and year to date, respectively. Total gross loans ended the second quarter at $796.8 million, reflecting an increase of $25.3 million, or 3.29%, for the quarter and $40.4 million, or 5.34%, year to date.
The Company was able to provide critical capital to the small business community in South Carolina through the SBA PPP loan program funding $39.0 million to over 272 businesses. These loans were the largest contributor to loan growth in the quarter. This growth was offset by a decrease of $22.1 million, or 26.90%, in the Company’s specialty floor plan lending division. Loans excluding these two portfolios grew $8.5 million, or 1.23%, from March 31, 2020.
We continue to focus on the ever-changing environment in 2020 as it relates to our Company, employees, customers and other stakeholders. The effort of our employees in assisting our existing and new customers through the SBA PPP loan program was extraordinary. These times have shown to the community the value of having a great banker and a true financial partner to help in times of need.
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About GrandSouth Bank: GrandSouth Bancorporation, the parent company of GrandSouth Bank, was founded in 1998 as a commercial bank. Since then it has grown into seven locations and offers a full array of commercial banking services for individuals and small businesses. The bank has over $992 million in assets as of June 30, 2020, including over $796 million in gross loans. Learn more at: