Preferred Bank to take 1Q hit on foreclosed Manhattan condos
Preferred Bank in Los Angeles will take a roughly $1.4 million hit to earnings after selling two multifamily properties in Manhattan.
The $4.2 billion-asset bank disclosed that it sold the buildings late last month for about $35.5 million. The amount was 4% below the properties' book value.
Preferred acquired the properties through foreclosure in January after the developer became delinquent on two loans with a combined balance of $41.8 million.
Aaron James Deer, an analyst at Sandler O'Neill, wrote in a note Monday that the sale was "disappointing" because the properties appraised at $40.6 million in January and $63.6 million when the nonaccruals were first disclosed. Deer lowered his earnings estimate for the first quarter by a nickel, to $1.19 a share.
Still, Deer said, it is a positive that Preferred resolved the issue.