Two already troubled community banks recorded additional first-quarter losses this week in revising their results after re-evaluating problem loans.
The revision caused First State Bancorp. in Albuquerque to drop from "adequately" capitalized to "undercapitalized" status by regulatory standards. The $2.8 billion-asset company announced Monday that it boosted its provision for loan losses by $10 million, which widened its losses by an additional $10 million, to $25.7 million. The change lowered the bank's total risk-based capital ratio to 7.53% as of March 31.
First State said the increased provision was necessary to recognize further declines in the value of real estate that was securing nonperforming loans.
Bank of Florida Corp. in Naples, with $1.5 billion in assets, reported that its loss widened by 45.6%, to $48.2 million, in a revision following additional impairments on several nonperforming loans. Chief Executive Michael MacMullan said in a press release Tuesday that the change would not affect its capital-raising effort.
Bank of Florida's three subsidiaries are already "critically" undercapitalized. The banks received prompt corrective action orders on March 18 that gave them 30 days to reach "adequately" capitalized status. They missed the deadlines and the company's consolidated leverage ratio was negative-0.66% as of March 31, according to SEC filings.