Horizon Financial Corp. in Bellingham, Wash., has warned that it may fail because the company and its bank unit are critically undercapitalized.
The $1.3 billion-asset Horizon said late Monday that it lost $35.1 million in its fiscal second quarter, which ended Sept. 30. The loss was nearly eight times larger than a year earlier.
The bank unit's total risk-based capital ratio fell to 1.98%, its Tier 1 risk-based capital ratio to 0.99%, and its leverage ratio to 0.77%.
It signed a formal agreement with regulators in March that required it to obtain a Tier 1 leverage ratio of 10% in 270 days.
The company said it is unknown if it will be able to raise the needed capital.
Nonperforming assets were $128.4 million, or 9.88% of total assets on Sept. 30, down 29 basis points from June 30 but up 464 basis points from a year earlier.