Central Valley Community Bank in Fresno, Calif., plans to report a fourth-quarter loss because of a hefty chargeoff of commercial loans.
The $1.2 billion-asset company disclosed in a regulatory filing Friday that it recorded a $7.7 million chargeoff and an $8.4 million loan-loss provision for the quarter following the discovery of faulty loans. The company said its bank remains "well-capitalized" and expects to report a profit for the fiscal year.
Central Valley said in its filing that a December review of a longtime borrower determined that the client had "significantly overstated" its inventory collateral in previous reports to the bank. Central Valley "made downward revisions in its estimates" of the collateral's value and reclassified the loans, the filing said.
The company said it will report its fourth-quarter results on Feb. 13.