Tamalpais' 3Q Loss Ratchets Up Capital Pressure

Nonperforming assets rose dramatically at Tamalpais Bancorp in San Rafael, Calif., forcing it to swing to a loss of $5 million in the third quarter, from a profit of $1.5 million a year earlier.

The $695 million-asset company, which is under regulatory pressure to boost its capital ratios, said Tuesday that its nonperforming assets jumped more than 269% from the second quarter, to $77.2 million, or 11.11% of total assets. A year earlier, the nonperforming assets totaled $4.3 million.

Tamalpais said that it is negotiating the sale of $37.4 million of the nonperformers, which it began shopping last month. It also said a $3.9 million nonperformer was paid off in October.

The company acknowledged a $500,000 loan from board member Larry E. Rosenberger, the former chief executive of Fair Isaac Corp., but did not specify how it would use the money.

For a second consecutive quarter, the company's bank unit was only adequately capitalized, with a total risk-based capital ratio of 9.24%. This ratio dropped 45 basis points from June 30.

In September, the bank signed a cease-and-desist order with the Federal Deposit Insurance Corp. and the California Department of Financial Institutions to boost this ratio to 12% by Dec. 31. Should it fail to do so, it must come up with a plan to sell itself.

Lately the company has been laying the groundwork for a stock offering. It filed a proxy statement with the Securities and Exchange Commission last week asking shareholders to approve a reverse stock split and to increase the number of shares it can issue.

The reverse stock split would help to boost its share price, which dipped below $1 on Tuesday. In afternoon trading the stock was down 9% from Monday's closing price, to 96 cents.

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