LYNNWOOD — City Bank announced a net loss of $38.26 million for the fourth quarter of 2009, an improvement from the $64.88 million the bank lost in the same quarter of 2008.
But that total brought the bank’s yearly losses to $104.61 million for 2009. In 2008, the bank lost $60.84 million.
A loan portfolio comprised of battered real estate investments continues to plague the bank as it struggles to regain profitability.
“The bank’s losses for the quarter and the twelve months were significantly impacted by declining values in the market for the bulk sale of residential building lots,” said City Bank CEO Martin Heimbigner.
In an effort to avoid selling bank-owned lot, City Bank is developing the properties. Accounting requirements require the bank carry the properties at distressed market prices.
“Once we have been able to complete finished houses on building lots our realization on the original loan amount has been approximately 90 percent,” Heimbigner said.
The bank reported the primary causes for fourth-quarter loss were a non-cash provision for loan losses of $46.50 million, a non-cash valuation adjustment for foreclosed real estate of $21.99 million, and a reduction in interest income totaling $5.83 million.
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