Shares of Beverly Hills Bancorp Inc. plunged Tuesday after the Calabasas, Calif., company announced that it had lost $6.6 million in the fourth quarter, and that it would preserve its capital instead of paying cash dividends.
The $1.5 billion-asset Beverly Hills also said after the market closed Monday that it has terminated an agreement with the investment banking firm it hired in June to review its strategic options, including a possible sale.
It did not give any details about the review, except to say the board continues to reconsider the company's strategy, given the economic downturn, particularly in real estate.
Beverly Hills said its loan-loss provision jumped 14-fold from a year earlier, to $14.4 million. It also cited a $3.1 million goodwill impairment charge, and a 4% drop in net interest income, to $7.2 million.
A year earlier it reported a $6.4 million profit after a pretax gain of $8.5 million on the sale of a branch.
The company said that it is meeting all regulatory capital requirements, and that its First Bank of Beverly Hills remains well capitalized. But because of the troubled economy, it has suspended dividend payments for this quarter and possibly for the rest of the year.
By late Tuesday afternoon Beverly Hills' stock had fallen nearly 15%, to $3.32.
At yearend it had $29.9 million of nonperforming assets, or 2% of its total, including $27.6 million of construction loans.
