A southern Connecticut bank is hoping to get back in the black after it sold off $18 million of nonperforming commercial loans to an Ohio investment company.

BNH Bancshares announced it had completed the sale of the loans to Cadle Co. of Newton Falls, Ohio, for about $11.7 million, or 65% of book value.

The package included mostly restructured commercial loans backed by real property in the state. No actual property was involved, however.

The loans had been on the bank's books for several years, but as at many New England institutions, most had stopped performing in 1990 or 1991 when "the real estate market went into the tank up here in Connecticut," said chief financial officer John F. Trentacosta.

The sale still leaves the $292 million-asset bank with $16 million in nonperforming loans, or about 5% of total assets. That compares with a high of $42 million, or 14% of all assets, at the beginning of 1992.

"They continue to be impaired:" said Tracey Stangle, senior vice president of First Albany Corp. in Hartford, Conn. "Even now they have a relatively high number of nonperforming assets. But maybe this will enable them to get back on track."

Mr. Trentacosta said BNH isn't planning any additional sales to get rid of the rest of the problem loans. "We believe we can work through the remaining nonperfoming assets," he said.

The bank recorded the sale in the second quarter, causing it to take a loss of $6.5 million in that period.

BNH is still under a September 1991 cease-and-desist order with the Federal Deposit Insurance Corp. that includes a 6% minimum leverage capital level.

The sale brought the bank's capital level down to 4.6% from 6.9% in March, but Mr. Trentacosta said bank officials had the blessing of regulators before the sale.

"Everyone thought it was in the bank's best interest to dispose of the assets"' Mr. Trentacosta said. "If we're going to have the consistent drag of these nonperforming assets on us, earnings just couldn't be assured."

Mr. Trentacosta said he hopes regulators will be willing to lower the capital requirement for BNH, now that it is resolving its problems.

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