Temecula, CA (PRWEB) October 23, 2012
Mission Oaks Bancorp, whose subsidiary is Mission Oaks National Bank, announced unaudited results for the third quarter of 2012.
Mission Oaks Bancorp reported a net loss of $729,000, or $0.06 per share, for the quarter that ended September 30, 2012. This compares to a loss of $1,357,000, or $0.12 per share, in the prior quarter.
For the first nine months of 2012, Mission Oaks Bancorp reported a loss of $3,695,000, or $0.32 per share.
The operating loss for the third quarter was due to reductions in the valuations of OREO (Other Real Estate Owned) properties at the subsidiary bank. During the quarter, the bank wrote down the value of its OREO by $590,000. The bank also had legal fees of $122,000 during the quarter, most of which were related to problem asset resolution.
“Although we continued to report operating losses in the third quarter, there were a number of positive factors that should favorably impact our future performance,” said Gary Deems, president and chief executive.
“During the last three months, we had only $162,000 in loan charge offs, down from more than $1 million in each of the first two quarters of the year. In addition, our loan loss recoveries in the third quarter actually exceeded our charge offs by $58,000 and allowed us to reduce our quarterly loan loss provision to $92,000 compared to an average of more than $700,000 per quarter in the first half of the year,” Deems continued.
“We also continued to make progress in reducing the size of our problem asset portfolio,” Deems said. “Since the end of 2011, non-accruing loans dropped from $11.5 million to $4.6 million, and OREO declined from $3.6 million to $1.6 million.”
“Despite these significant improvements in asset quality, we have maintained our Allowance for Loan Losses (ALLL) at a very conservative 4.36 percent of gross loans as of September 30, 2012. This was up from 4.19 percent at the end of the prior quarter,” he continued.
The bank also steadily improved its net interest margin, which went from 3.71 percent in December 2011 to 4.44 percent at the end of September, 2012. This increase is largely due to the reductions in non-accruing assets and their replacement with interest-earning loans. It also reflects improvements in the cost of funds.
At the end of the third quarter of 2012, Mission Oaks reported deposits of $100.7 million, gross loans of $79.1 million and total assets of $110.9 million. These totals are down 18.7 percent, 16 percent and 19.6 percent respectively, from the end of 2011.
“The decline in size during 2012 is almost entirely the result of the reductions in problem loans and OREO,” said Deems. “We are now shifting some of our focus to business development while we continue to work at eliminating our remaining problem assets.”
Mission Oaks Bancorp’s only subsidiary is Mission Oaks National Bank, a federally chartered bank that opened in 2000 and currently operates branches in Temecula and Fallbrook, CA. The bank closed its Lake Elsinore Office on April 19, 2012, and took a one time charge of $440,000 during the first quarter of 2012 in conjunction with the closure.
Mission Oaks Bancorp’s common stock is traded over the counter under the stock symbol MOKB.OB.
Forward Looking Statements: this press release may contain statements concerning future performance, developments or events concerning expectations for growth and market forecasts, and other guidance on future periods that constitute forward looking statements. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, the effect of interest rate changes, the ability to control costs and expenses, financial policies of the United States government, and general economic conditions.
Gary W. Deems
President/Chief Executive Officer