Shares of United American Bank fell Tuesday after the San Mateo, Calif., company said it expects to report a loss for the second quarter as a result of a customer's bankruptcy.
The $257 million-asset United American said it would take a $500,000 loss provision of the quarter on a consumer loan made to a borrower who is under investigation for allegedly falsifying loan documents. The bank also said that it expects to take a provision on the rest of its portfolio, though the amount has not been determined.
Its loan-loss provision for the first quarter was $100,000.
Gerald Brown, United American's chief financial officer, said that the borrower is in bankruptcy proceedings and that bank may be able to recover some funds if he can sell his home.
In late trading Tuesday, United American's shares were down more than 8%, to $13.75.
