Horizon Financial Services Corp. of Oskaloosa, Iowa, reported a loss for its fiscal third quarter, which ended March 31, and said its thrift subsidiary has consented to the terms of an enforcement order from the Office of Thrift Supervision.
The $129 million-asset company said last week that it lost $3.5 million, or $4.50 per diluted share, in the quarter. A year earlier it reported a loss of a loss of $266,000, or 34 cents per diluted share. For the nine-month period that ended March 31, it reported a loss of $3.7 million, or $4.73 per diluted share, compared with a loss of $476,444, or 61 cents per diluted share, in the same period a year earlier.
Horizon's loan-loss provision for the quarter rose more than sixfold from a year earlier, to $3.3 million. For the nine months that ended March 31, it reported $4.3 million of provisions.
Last week Horizon said the OTS had issued an order dated May 18 that requires its Horizon Bank to increase capital to minimum regulatory levels, hire a chief credit officer, and update its loan files. The thrift also must "submit all requests to engage in a commercial lending transaction to the OTS at least 21 days prior to the anticipated loan approval date."
Horizon Financial must also improve its loan underwriting, establish an independent loan review program, and establish or improve internal systems to evaluate asset and liability concentrations, cash flow, and internal audits.
