Sonoma Valley Bancorp has been required to restate its third-quarter results after a recent regulatory exam.
The $354 million-asset company in Sonoma, Calif., announced late Friday that it is reporting a third-quarter loss of $19 million, up from $495,000, after regulators advised its Sonoma Valley Bank unit to adjust values on impaired loans to reflect market conditions.
The company is expected to increase its provision for loan losses by more than 840%, to $24.5 million, for the quarter. It said it anticipates filing the restatement by March 31, along with its fourth-quarter results and 2009 annual report.
As a result of the restatement, its bank was placed under an enforcement action by its regulators, the Federal Deposit Insurance Corp. and the California Department of Financial Institutions. This requires Sonoma Valley to submit a capital plan and limit its growth.
The company did not state its bank's capital ratios. Its Dec. 31 call report showed the bank was undercapitalized, with a total risk-based capital ratio of 6.36%.