Heritage Oaks Bancorp in Paso Robles, Calif., reported a net second-quarter loss of $5.8 million, compared with net income of $507,000 a year earlier.
The $1 billion-asset parent company of Heritage Oaks Bank said Wednesday that the loss stemmed from large jumps in its provision for loan losses and chargeoffs as it seeks to clean up problem assets.
The net loss was four times bigger than the $1.3 million net loss in the first quarter. This was largely because the company more than tripled its provision for loan losses from the first quarter, to $16.1 million.
Net chargeoffs rose to $12.5 million in the second quarter, compared with $1 million in the first quarter and $2 million a year earlier.
"During the second quarter the bank took an aggressive position with respect to reducing the level of nonperforming assets," Heritage Oaks President and Chief Executive Lawrence P. Ward said in a press release.
