Bank of Alameda announces continued losses
Bank of Alameda parent NorCal Community Bancorp this week announced losses in 2010, reporting a net loss of $5.957 million, or $1.43 per diluted share, for the year. The bank faced $5.029 million in losses, or $1.60 per diluted share, in 2009.
Construction and development loan losses continued to plague the bank’s balance sheets in 2010, the bank said in a release, though bank President and Chief Executive Officer Stephen G. Andrews said the bank made “significant progress” in the second half of the year toward reducing problem assets and the costs associated with them.
The bank also raised $7.45 million in November through a private stock offering, with the money coming primarily from institutional investors and the bank’s officers and directors. The offering was made after the bank entered into a consent order with regulators, one of hundreds issued to small banks across the country last year in an effort to keep them up and running.
The bank had suffered quarterly losses since mid-2009 and had to restate its earnings in 2008. In 2010, it saw its Texas ratio – a measure of a bank’s credit troubles calculated by dividing a bank’s non-performing assets by its equity – rise to 83.95 before settling to 40.17 at the end of the year. A bank whose ratio reaches 100 is thought to be more likely to fail.
The bank’s Texas ratio was 4.72 at the beginning of 2008. At the end of 2010, its ratio was 67th of 100 similar-size American banks.
Net loan charge-offs – loans banks take off the books and charge against their loss reserves – declined in 2010, dropping to $5.6 million, or 2.98 percent of loans outstanding, from $8.8 million, or 3.82 percent of loans outstanding, in 2009. The bank also faced $1.1 million in real estate impairment charges in 2010, compared to $271,000 in 2009.
Nonperforming assets dropped to $13.5 million in 2010, down from $19 million at 2009 and $22 million in the third quarter of 2010.
Meanwhile, the company’s valuation allowance – tax assets the bank doesn’t expect to realize due to an anticipated lack of profits – was raised to $5.3 million from $2.5 million in 2009.
At the end of 2010, the bank had $255.7 million in assets, up from $248.2 million in assets at the end of 2009. Deposits increased $5.9 million, to $225.9 million, while loans and leases dropped $40 million, to $163 million.
The bank is considered “well capitalized” by regulators, with a risk-based capital ratio of 17.9 percent and 17.6 percent. That’s above the 10 percent required by regulators.