Shares of First California Financial Group Inc. dropped Monday after the $1.47 billion-asset Westlake Village company said that higher loan losses caused it to revise its first-quarter results and swing to a loss.
First California said after the market closed Friday that it lost $1.9 million, or 18 cents a share, in the first quarter. It had previously reported a profit of $413,000, or two cents a share.
The company said its provision for loan losses jumped to $5.1 million, a 359% increase compared with the results it released on April 22. It adjusted the net chargeoffs upward by 847%, to $1.8 million, while nonaccrual loans and loans past due 90 days or more declined by 15%, to $8.4 million, or 0.9% of total loans.
First California, which said it remains well capitalized, also estimated that for the second quarter it would report a provision of $1 million and net chargeoffs of $500,000. It said nonaccrual loans and loans past due 90 days or more are expected to climb to $28 million, or 3% of total loans, by June 30.
C.G. Kum, the company's president and chief executive officer, attributed the revision to "the ongoing challenges" of the economy and its impact on customers. The announcement came only a few days after First California's bank unit promoted William Schack to chief credit officer. He was the senior vice president of credit administration.
"The strengthened allowance for loan losses combined with the recent addition of a highly qualified chief credit officer have positioned us better to navigate through the challenging economy," Kum said. The company's stock fell 9.4% Monday, to $6.56.