Civista Bancshares in Sandusky, Ohio, will record a gain of roughly $1.5 million in the second quarter after a nonperforming loan was fully repaid.
The $1.5 billion-asset company disclosed in a regulatory filing Wednesday that it had recovered about $2.3 million tied to the loan, including $1.3 million that had been charged off and $960,000 in nonaccrued interest. The chargeoff had been based on deteriorating real estate collateral values that took place during the last recession, Civista said.
"Typically, payments or payoffs received on nonperforming loans do not rise to this level of recovery," the filing said. "However, Civista has commented often through the recession that it would work with customers over the long term when eventual recovery was possible."
The gain will take the form of a reversal in Civista's loan-loss provision.