Thursday, March 12, 2009

C&D loans hurt another local bank

From the Portland Business Journal:

Columbia Commercial Bancorp has reached a deal with the Federal Deposit Insurance Corp. and the Oregon Division of Finance and Corporate Securities, the bank announced Thursday.
The Hillsboro-based bank (OTCBB: CLBC) and its wholly owned subsidiary, Columbia Community Bank, have agreed to financial benchmarks to reduce problem loans.
“The Bank’s residential construction and land development loans are at the root of our challenges,” said CEO Rick A. Roby. “Challenges in this loan portfolio surfaced in mid-2008 and have been more profound than ever anticipated due to the unprecedented decline in the local and regional real estate markets. Fortunately our loan portfolio is diverse and the other segments continue to perform well, allowing the Company to still report net income for 2008 of $1.3 million, its ninth consecutive year of profitability in its 10 years of operation.”
The agreement also calls for the bank increase its capital and liquidity. The bank will maintain capital levels above those normally required.