Heritage Oaks Bank reports huge losses
August 6, 2010
Heritage Oaks Bancorp on Wednesday reported a second quarter loss of $5.8 million which the bank attributes to a $16.1 million provision for loan losses and $12.5 million in charge-offs, loans the bank has written off as uncollectable. [MarketWatch]
In comparison, during the second quarter of 2009, the San Luis Obispo based bank reported a loss of $500,000.
The bank’s second quarter losses came as it aggressively struggled to work through its problem loans and reduce its level of total non-performing assets, said Lawrence P. Ward, President and Chief Executive Officer in an earnings release.
In early March, federal bank regulators took enforcement action against the bank, which operates 15 branches in San Luis Obispo and Santa Barbara counties, and banned the company from paying dividends or incurring debt as part of a written agreement between the company and the Federal Reserve Bank of San Francisco.
On March 12, in order to increase its capital and strengthen its balance sheet, the bank raised proceeds of approximately $60 million through the sale of securities.