Encore Bancshares Inc. in Houston said Friday that it lost $12.7 million in the second quarter, compared with net income of $821,000 a year earlier.

The $1.6 billion-asset company said the loss was driven by its exit from the Florida market.

Encore in May closed the sale of two of its Florida branches, with deposits of $50.5 million. It also charged off $13.2 million of commercial loans from the Florida portfolio and wrote down $2.8 million of loans held for sale, reducing the legacy commercial loans to $56.2 million.

The company said its final exit from Florida is on track; it has $70.6 million of Florida loans held for sale and $184.1 million of deposits for sale.

The provision for loan losses was $18 million, compared with $2.9 million the year earlier, which Encore said reflects declining collateral values in Florida. And nonperforming assets grew 50% from the first quarter, to $77.8 million.

At June 30, Encore had a Tier 1 capital ratio of 14.6% and a tangible common equity ratio of 6.8%.

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