Professional Bancorp of Santa Monica, Calif., still reeling from the collapse of its sale to a neighboring thrift company, revealed this week that it lost $2.4 million in the third quarter.
Professional, which specializes in lending to doctors, dentists, and medical billing companies, blamed the $1.17-per-share loss on two troubled loans. It said it has increased its loan-loss provision by 278% to cover potential losses as well as longer-than-anticipated repayments from health-care clients struggling through turmoil in that industry.
The $270 million-asset company earned $512,000 in last year's third quarter.
Professional has suffered a series of setbacks. In September, Firstfed Financial Inc. of Santa Monica called off its $50 million acquisition of Professional over concerns about the price. Since then, Professional's stock price has plunged 39%; it was trading at $9.50 at midday Wednesday. The company, which started looking for a buyer a year ago, says it is doing so again.
Professional has recruited a new management team to help reverse its fortunes. Last week it named Gene F. Gaines, a senior executive at the insurance giant SunAmerica Inc. and a longtime commercial banker, as chief executive officer; he succeeds acting CEO Melinda A. McIntyre-Kolpin, who will remain president of the company and its First Professional Bank. A bank consultant, Larry Patapoff, was named senior vice president and chief financial officer.
Mr. Gaines said Professional hopes to restructure or charge off the two troubled loans, which were made to longtime customers. They are in the food and the services businesses, the company said; it declined to be more specific.
Ms. McIntyre-Kolpin said Professional's efforts to sell itself have met with some interest from specialty finance companies, banks, and thrifts. "We're still going full speed ahead" with sale efforts, she said. "We have not lost sight of that objective." -- Matt Andrejczak