(CORRECTION: An earlier version of this story included incorrect information regarding First Community Bank's loss for 2008 through 2011. The bank reported a combined $27.6 million loss during that four-year period.)
SANTA ROSA -- First Community Bank is realizing a financial turnaround since its recession-related losses peaked two years ago, restoring profitability and improving asset quality while attracting new demand for loans.
Most recently, that trend has included a sixth consecutive profitable quarter and a portfolio of nonperforming assets that has been reduced by more than half, according to the bank's latest filing with regulators from June 30.
Yet the groundwork for the reversal currently playing out at First Community began even earlier, including a pointed effort to resolve troubled loans that began under founding chief executive Kathy Pinkard and, more recently, under current CEO Deborah Meekins.
[caption id="attachment_59600" align="alignright" width="215"] Deborah Meekins[/caption]
As the improving regional economy spurs new demand for financing, Ms. Meekins, a well-known name in North Bay banking who joined First Community in August 2012, said that the bank is poised to grow anew while eying new business in areas like energy efficiency and renewable energy ventures.
"The recovery had already started when I got here," she said. "In the last year or so, we've seen things really improve."Regulators clear First Community Bank from special oversightSept. 16, 2013
SANTA ROSA -- Financial regulators told Santa Rosa’s First Community Bank this month that they have ended a period of heightened scrutiny that began two years ago. [read more]
First Community was among the many banks in the North Bay and beyond hit hard during the recession, setting aside millions to cover losses as borrowers fell behind on loan payments.
The bank reported a net loss of around $27.6 million for the four years from 2008 to 2011, peaking with an annual operating income loss of $19.5 million in 2011.
Those losses -- and the recent financial crisis itself -- began only three years after the bank began serving customers in February 2005. It was the first new bank in Sonoma County in more than a decade, born from an $18 million initial capitalization by real estate developer William Gallaher and other North Bay business leaders.
A reputation for competitive terms on loans and deposits and efficient turnaround for business financing helped propel the privately held bank's rapid growth, reaching around $800 million in assets in 2009.
"They were the most rapidly growing bank in the history of the North Bay for sure, and one of the fastest growing in the history of California," said Fred Ptucha, a financial adviser with Progressive Asset Management Group in Santa Rosa and a long-time tracker of community bank financials in the North Bay.
Today, a portfolio currently representing around $630 in assets and $494 million in loans reflects a major resolution of those loans that became distressed over the past few years, he said.
The proportion of assets qualified as nonperforming has been reduced by more than 60 percent, from around 10 percent of assets at the end of 2011 to 3.8 percent in June of this year, according to the most recent filing. Net loans, meanwhile, have grown by 8 percent since June of last year.
First Community has also reduced the $25.8 million in foreclosed real estate it held in June of last year by 35 percent, with those sales helping to propel overall income. Net income of $7.5 million for the recently reported quarter was around five times the income from the same quarter last year.