PremierWest reports losses in the first quarter of 2012

PremierWest Bancorp said its losses widened during the first quarter of 2012, even as its problem loans declined and it announced the closure of branches and layoffs.

The Medford-based parent company of PremierWest Bank reported a $4.8 million loss, as it set aside $3.5 million for loan losses, spent $2.4 million on foreclosed property and absorbed $829,000 in costs associated with branch closures.

The first-quarter loss followed a PremierWest $4.1 million loss in fourth-quarter 2011.

"It's never satisfying to post a loss," said PremierWest President and Chief Executive Officer Jim Ford. "But in our case, as we are working through these problem loans, a loss is the cost of doing business."

Ford said non-performing loans are the lowest since June 2009 and sub-standard loans are at the lowest point since February 2009.

The good news is appraisals on foreclosed properties are flattening out, rather than reflecting plummeting land values.

"In the last six months the declines have been much lower, about 10 percent at annualized rate," Ford said. "In times past we saw declines of 25 to as much as 70 percent."

Ford isn't necessarily predicting the real estate market bottom has been reached over its territory from Douglas County to south of Sacramento, but there are positive signs.

"If we are nearing a bottom that bodes well for us as we work out problem loans we won't have as large expenses related to loans."

— Greg Stiles

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