Quaker City Bancorp had bad luck in its first full quarter as a public company, losing $1.2 million.
The company blamed January's Northridge earthquake.
Several California thrifts have reported losing money because of the damage to properties - especially multifamily dwellings underlying the mortgages in their portfolios. Quaker City, which owns the $500 million-asset Quaker City Federal Savings and Loan in Whittier, has been the hardest hit so far, with 2.8% of its loan portfolio adversely affected by the January quake.
Quaker City also has exposure in the moderate- and Low-iticome neighborhoods that it has served profitably for years in parts of Los Angeles County.
As a multifamily and singlefamily lender in these areas, Quaker City will be affected by the state and federal government's efforts to rehouse those families displaced by the disaster, according to sources familiar with the thrift.
Shareholders Alerted
"You can't say they haven't told shareholders what they're dealing with," said one analyst, who wished not to be named. "They went to great lengths to explain the earthquake's impact, something I haven't seen many other institutions in Southern California doing."
Alter the quake, $7.4 million of Quaker City's multifamily loans were on nonaccrual status, comprising fully half the association's total nonaccrual loans.
Quaker's total nonperforming assets are $20.3 million, up from $12.9 million a year ago and more than 4% of total assets, according to the company's recently filed quarterly report.
Nine-Month Loss at $826,000
The March loss brings the company's fiscal nine-month loss to $826,000, compared with a $3 million profit for the same period last year.
Provisions for loan losses were the driving factor in the losses, with $3.5 million in provisions in the March quarter compared with $112,000 a year earlier. Of the $3.5 million provision, $1.95 million related directly to the earthquake damage.
Quaker City management's heavier-than-normal loan-loss provisions could continue through this year as well.
"As a result of weakness in certain real estate markets, increases in the valuation allowances may be required in future periods," the company said in its quarterly report.
