PremierWest trims loss in Q1
PremierWest Bancorp’s losses fell in the first quarter and capital levels climbed, as signs emerged that its loan portfolio problems may be near or past their peak.
Medford-based PremierWest (NASDAQ: PRWT) reported a loss of $3.3 million, or 10 cents per share, for the three months ending March 31. A year earlier, its loss was $4 million, or 16 cents per share.
Before taxes and payments related to PremierWest’s participation in the Troubled Asset Relief Program, its loss was $2.7 million, compared with a $6.4 million loss in the first quarter of 2009.
The parent of PremierWest Bank reduced foreclosure holdings by $5.3 million and charged off fewer bad loans than in the previous quarter.
Yet major challenges remain for the bank, which on April 6 was ordered by the Federal Deposit Insurance Corp. and state regulators to bolster capital levels, improve liquidity, work through delinquent loan problems, and reduce its reliance on “hot money” brokered deposits. PremierWest is one of nine Oregon banks now operating under an enforcement order.
“We do not believe the recession has run its course and think that recovery will proceed with erratic movement of economic indicators during 2010,” CEO James M. Ford said in a statement.
“However, we are confident that we are doing everything possible to assure that PremierWest will be on the leading edge of the community bank recovery in our territory.”
The regulatory order came after months of behind-the-scenes talks, and by the time it was issued PremierWest had already started addressing regulators’ concerns.
In March it raised $17.3 million in new capital as part of a two-part capital raise that ultimately brought the bank $33.3 million. That first capital raise brought to 8.2 percent the bank’s leverage ratio, which is a measure of its ability it meet financial obligations. That far exceeds the FDIC’s “well capitalized” level, but regulators want PremierWest to go further and raise the leverage ratio to 10 percent.
PremierWest had also eliminated all $39.5 million in “hot money” deposits from its books by the end of the quarter, while growing total deposits 10 percent, year-over-year to $1.4 billion.
These moves will bolster PremierWest’s soundness as it continues to address problems in its loan portfolio.
PremierWest shares closed down 3.1 percent at 95 cents on Thursday. The stock’s 52-week range is 45 cents to $4.30.
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