1st Pacific Bancorp, parent of 1st Pacific Bank of California, cited the write-off of $10 million in goodwill on a bank acquisition and adding $9 million to reserves for problem loans as reasons for a net loss of $14.9 million last year, compared to a net profit of $2.46 million in 2007.
The write-off was on the assets of Landmark National Bank, which 1st Pacific Bancorp acquired in 2007 for $24 million.
As of Dec. 31, the bank reported holding $13.6 million in nonaccrual loans and foreclosed real estate, compared to the prior year’s fourth quarter when it held $4.2 million. The ratio of problem loans to total assets was 2.8 percent compared to 1 percent at the end of 2007.
CFO Jim Burgess said the bank added $7.7 million into the problem loan category in the fourth quarter. The bulk, some $9.4 million, derived from residential construction and land development loans.
While the net loss sounds bad, the goodwill write-off is a non-cash accounting charge, and doesn’t affect the bank’s capital base, the company said.
Traded on Nasdaq under FPBN, shares of 1st Pacific Bancorp sunk to $2 on Feb. 4, giving it a market capitalization of about $10 million.
, Mike Allen