West Coast Bancorp in Lake Oswego, Ore., said it lost $8.2 million in the fourth quarter, as losses on loans for custom-built homes ballooned.
The earnings-per-share basis loss was 53 cents. On average, analysts polled by Thomson Reuters had estimated an 11-cent loss.
The $2.5 billion-asset company announced the results Monday. It took a $16.5 million provision for loan losses, versus $30 million a year earlier and $9.1 million in the third quarter.
It provisioned $5 million on its so-called two-step construction loans — loans to individuals building custom homes, with the intention that a third-party lender would then finance the mortgage. The loans, which West Coast stopped originating in late 2007, were aimed at borrowers who intended to live in the home, but analysts say there is evidence that loans were taken out fraudulently by speculators.
At Dec. 30, $110 million of the two-step loans were not performing, down from about $118 million three months earlier. These loans accounted for 4.4% of West Coast's nonperforming assets. In all, 7.9% of its assets were nonperforming.
