Despite shrinking assets by a fifth in 2009, Saehan Bancorp in Los Angeles reported that its bank unit was significantly undercapitalized at the end of the fourth quarter.
The $668 million-asset company reported late Friday that its fourth-quarter loss widened by 110% from a year earlier, to $23.9 million. Driving the loss was a $20 million deferred-tax-asset allowance. Such charges are an indication that accountants doubt that the company will not return to profitability any time soon.
Nonperforming assets totaled $67.6 million for the quarter, up 45% from a year earlier, making up 10.1% of total assets.
The company's provision for loan losses for the fourth quarter was $3.3 million, down 83% from a year earlier. However, continued credit costs were enough to eat away the capital at Saehan Bank, which had a leverage ratio of 3.5% at the end of the quarter.