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Sour loan hits local bank
Published 12:00 am PDT Tuesday, July 22, 2008
Story appeared in BUSINESS section, Page D1
Greater Sacramento Bancorp posted sharp losses in revenue and earnings in the second quarter, the bank announced Monday. Officials blamed the loss on a troubled $6 million loan.
The Sacramento-based parent of commercial lender Bank of Sacramento posted a $197,000 loss on revenue of $4.73 million in the second quarter. In the same quarter a year earlier, the bank reported $752,000 in net income.
Revenue was down 13 percent from the $5.43 million recorded a year earlier.
Officials say the main culprit was a $6 million loan made in July 2006 to what the bank described only as a regional home builder. Greater Sacramento foreclosed in April, then wrote down its value an additional $1.1 million.
"That was definitely the lion's share" of the second quarter's loss," said William J. Martin, chief executive officer. In all, Greater Sacramento wrote down more than $1.49 million on loans in the second quarter, he said.
The foreclosed property is now for sale.
– Darrell Smith
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