The firm reported earnings of 54 cents for the quarter. For the six months to June the bank reported earnings 1.21 rupees per share on profits of 356 million rupees which fell 12 percent from a year earlier.
In the June quarter interest income rose 57 percent to 1.63 billion rupees but interest expenses rose at a faster 98 percent to 1,033 million rupees though the bank grew net interest income 16 percent to 601 million rupees.
PABC Bank's performing loans rose 18 percent to 39.0 billion rupees from December 2011.
Sri Lanka's Central Bank has set a limit of 18 percent for loan growth funded by rupees for this year.
Non-performing loans were flat at 2.6 billion rupees. The bank said its gross non-performing loans had improved to 3.3 percent in June 2012 from 4.52 percent a year earlier.
It provided 27 million for loan losses, against a provision reversal a year earlier.
Fee income rose 90 percent to 253 million rupees with foreign exchange income doubling 110 percent to 96 million rupees and unspecified other income rose 80 percent to 157 million rupees.
Non-interest expenses also rose 49 percent to 533 million rupees.
"The overhead increase is mainly due to the branch expansion and related activities that were undertaken during the last 18 months," PABC said in a statement.
"This strategic expansion drive assists the bank in establishing its presence in most parts of the country with 71 branches island wide."
It had opened 23 branches in 2011 and 7 in 2012.
The bank had grown deposits 17 percent to 41.4 billion rupees.
PABC's net assets edged up 2 percent to 3.69 billion rupees and gross assets grew 12 percent to 52.4 billion rupees.