The parent company of Merced-based County Bank reported its first-ever annual loss today, confirming the bank’s previous warnings that the faltering central San Joaquin Valley real estate market had hurt its portfolio of loans.
Capital Corp. of the West also reported it was suspending quarterly cash dividend payments to shareholders as part of a series of steps required by state and federal regulators to restore the bank’s capital levels.
County Bank lost $3.6 million in 2007, down from profits of $22.6 million in 2006, the bank reported in a Wednesday filing with the U.S. Securities and Exchange Commission. The report originally was set to be released March 17 but was postponed twice.
That 2007 loss wasn’t as steep as the $4 million loss the bank had projected last month, but was still the first money-losing year in the bank’s 30-year history, Thomas Hawker, chief executive, said in a prepared statement.
“The scope and rate of the decline of the real estate market were completely unexpected,” said Donald T. Briggs Jr., bank board member and chairman of a regulatory oversight committee formed last month to oversee the bank’s operations, in a prepared statement. “As a result, the company did not anticipate the value of the collateral to fall as quickly as it did.”