The company earned $5.5 million in the fourth quarter, a 58% decline from the same period in 2012. The decrease was largely driven by losses at the company's mortgage banking subsidiary, George Mason Mortgage. The mortgage unit lost $1.6 million in the fourth quarter, compared to a profit of $3.7 million during the same quarter in 2012.
Cardinal's net interest income dipped 1.8%, to $23.8 million. The company attributed the decline to lower average balances on interest-earning assets, which was the result of a $341.3 million decrease in average mortgage loans held for sale. Its net interest margin rose 8 basis points to 3.65%.
Noninterest income dropped 59%, to $6.1 million, largely because of a falloff in mortgage banking revenue. Steep drops in income from bank-owned life insurance and wealth management also contributed to the decline.
Noninterest expense rose climbed 16%, to $21.6 million, partly as a result of the company's acquisition of United Financial Banking. The company reported a 63% rise in the cost of salaries and benefits along with $160,000 of merger-related expenses. Cardinal also took a $300,000 write-down on investments due to concerns with the way the investments would be treated under the Volcker rule.
The $2.9 billion-asset company cut its loan-loss provision by 73%, to $400,000.