Losses from bad loans to developers continue to mount for 1st Centennial Bancorp in Redlands, Calif.
The $763 million-asset company announced late Thursday that it lost $2.8 million in the second quarter, nearly twice what it lost in the first quarter. In the second quarter of last year it earned $2.1 million.
Like a number of other California banking companies, 1st Centennial has faced a dramatic rise in chargeoffs and nonperformers in the last few quarters as home sales have slowed and builders have struggled to repay loans. At midyear nearly 16% of 1st Centennial's loans were nonperforming, versus 2.5% six months earlier. So far this year it has charged off $8.2 million of loans, versus just $41,000 in the first half of last year.
Though the company remains well capitalized by regulatory standards, its president and chief executive said in a press release that it is looking to raise more capital, and that it has hired D.A. Davidson & Co. as its financial adviser.
Shares of 1st Centennial declined 5.3% Friday, to $2.51. The shares have lost nearly 90% of their value this year.
