First Independent Bank reported a net income of $4.6 million in this year’s first quarter, a huge rebound after taking $31.9 million in losses for all of 2010, the Vancouver-based bank said Wednesday.
Bank executives welcomed the news, but also noted that the large profit was mostly due to a recovery of money from a loan that had previously been written off as a loss. Without that recovery on a single real estate loan, net income would have been in the half-million dollar range, said chief financial officer Steve Bernhoft.
First Indy maintained capital levels in excess of 15 percent in the first quarter, exceeding what regulators require, the bank reported in a news release. Nonperforming loans were reduced by 83 percent from March 2010, dropping to $10.4 million by the end of the quarter. Deposits increased by $30 million in the first quarter of 2011, the bank said. The information will be included in a report to be submitted next week to the Federal Deposit Insurance Corp.
Last year’s large losses resulted in part from a strategic decision by the bank to shift some losses to its owners, the Firstenburg family. The family-owned First Independent Investment group purchased millions of dollars in troubled loans from the bank, putting those loans in the bank’s loss category but removing them as a continuing drain on First Indy’s finances. Also, the Firstenburgs contributed some $28 million in cash and real estate to the bank to bolster its bottom line.
“It worked out as planned,” Bernhoft said, adding that he doesn’t expect the need for additional financial contributions from the family.
“With the economy still not growing at a pace everyone would like, it’s going to be a while until we get back to normal,” he said. “We’re just waiting for the economy to kick in.”
First Independent reports that it is ranked second in deposit share in Clark County by the FDIC and is the ninth largest bank in the Vancouver-Portland metro region.