Imperial Capital Bancorp Inc., parent company of San Diego-based Imperial Capital Bank, reported net income of nearly $700,000 for the first quarter, compared to $6.7 million in net income for the like quarter of 2007.
Imperial Capital put $4.3 million into its reserve balance during the quarter to deal with a surge of $64 million in problem loans that increased the total problem asset category to about $110 million, consisting of $91.5 million in problem loans and $18.4 million in foreclosed real estate.
“Our first-quarter results, while clearly disappointing, reflect a continuation of the challenging economic conditions that currently exist,” said CEO George Haligowski.
ICB said the bulk of the new problem loans, or those that are more than 90 days past due, came from $32.7 million in residential construction loans in two lending relationships; a $17.7 million residential land development loan; and a $4 million loan for the construction of a mixed-use project.
The $110 million in problem assets made up 3.1 percent of the bank’s total assets of more than $3.5 billion. Most lenders attempt to keep problem assets below 1 percent.
The bank was still well-capitalized, holding 8.34 percent in Tier 1 leverage capital on its books, above the 4 percent minimum.
Total assets during the past quarter declined by $7.5 million, to $3.5 billion. ICB is the area’s third largest bank.
Traded under the ticker IMP on the New York Stock Exchange, shares were down 2 percent in midday trading May 1 to $14.66, far below the bank’s book value of $44.38 as of March 31. The 52-week range was $13.68 to $55.59.
, Mike Allen