After 1st Pacific Bank reports $1.7 million loss, shares drop.Burned by more bad loans, banks are putting aside more reserves. The move means fewer dollars for the bottom line, and sometimes results in net losses, as it did for San Diego-based 1st Pacific Bancorp in the second quarter. The holding company for 1st Pacific Bank of California The Bank of California was founded in San Francisco, California on July 5, 1864 by William Chapman Ralston. It was the first commercial bank in the Western United States, the second-richest bank in the nation, and considered instrumental in developing the American Old West. reported a $1.7 million net loss for the quarter, and $1.2 million for the first half after it put an additional $3.6 million into its reserve balance to $7.8 million. The higher reserves are a direct consequence of the bank's problem loans more than doubling from the first quarter to $11.6 million, or 2.57 percent of its total assets of $452 million. It's nothing along the lines of what Downey Savings Bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. is facing, holding 15.5 percent in bad loans (see the Finance column on Page 9), but still not good. 1st Pacific has been mentioned as a possible merger target for a few community banks, but the latest financial results would likely scare away Verb 1. scare away - cause to lose courage; "dashed by the refusal" daunt, frighten away, frighten off, scare off, pall, scare, dash intimidate, restrain - to compel or deter by or as if by threats most suitors. The bank said one of the biggest reasons for the increase in reserves is two loans to a single borrower totaling $4.9 million that have defaulted. Before figuring the reserve provisions, the bank did a review of its entire portfolio. "We are satisfied based on this review that the bank is properly reserved at this time," said acting Chief Executive Officer Ron Carlson Ron Carlson is an American novelist and writer of short stories. Carlson was born in Logan, Utah, but grew up in Salt Lake City. He earned a masters degree in English from the University of Utah. . The question is whether more borrowers fall into arrears A sum of money that has not been paid or has only been paid in part at the time it is due. A person who is "in arrears" is behind in payments due and thus has outstanding debts or liabilities. and fail to pay off their debts. As of June 30, the bank was well capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. , holding Tier 1 capital Tier 1 Capital A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Notes: Equity capital includes instruments that can't be redeemed at the option of the holder. of 7.24 percent. But that was down from 8.18 percent for the same measurement in the first quarter, and 8.8 percent in June 2007. Shareholders exited the stock, traded as FPBN on Nasdaq, in droves the day following the results, pushing the price down 13 percent to $6.99 on July 29. Its 52-week range was $5.51 to $15.50. Send any news of San Diego-based public companies to Mike Allen via e-mail at mallen@sdbj.com. He can be reached at 858-277-6359. |
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