Citing trouble with its residential construction loans, State Bancorp Inc. in Jericho, N.Y., said Wednesday that it swung to a $5.1 million loss in the first quarter, from a $3 million profit a year earlier.

The $1.6 billion-asset company said it fattened the provision for loan losses 525%, to $8.4 million, as nonaccrual loans and chargeoffs rose.

It also took a $4 million noncash charge to mark down the value of its investment in a trust-preferred collateralized debt obligation.

The nonaccruals jumped 133%, to $28 million, or 2.5% of total loans. State attributed the increase to two residential construction loans totaling $14 million and three commercial real estate relationships totaling $8 million.

The company charged off $2.8 million of loans in the quarter, compared with a net recovery of $100,000 in the same period a year ago.

Thomas M. O'Brien, State's president and chief executive officer, said in a press release that it had accepted more risk in its construction lending from 2004 through 2007 — a decision that in hindsight seems aggressive and continues to hurt its performance. "Fortunately, it is a finite portfolio and we will work our way through it," he said.

State reduced its operating expenses by 8.7% from a year earlier, to $10.2 million, partially offsetting the higher provision and the other-than-temporary-impairment charge. The savings came mostly from salaries and benefits; the company said its headcount is down 8% because it has been closing or selling noncore businesses over the past year.

Despite that, total loans and leases outstanding rose 4% from a year earlier, to $1.1 billion. O’Brien said the loan growth more than offset the sale of $64 million in assets from State’s former leasing unit in June.

The company, which received $37 million in government capital in December, also stressed that its capital ratios remain strong.

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