Bad loans led to lean returns

Six borrowers accounted for $39.5 million, or 94.3 percent, of PremierWest's $41.9 million in nonperforming assets:

  • One of multiple loans secured by Northern California real estate totaling $14.2 million. Foreclosure by another lender to the same borrower on an adjacent property during the past quarter led PremierWest to re-categorize the loans as nonperforming.
  • Two purchased loans of $5 million and $7.3 million, one secured by approved residential lots and the other of which is unimproved land in Northern California. PremierWest purchased a minority position from two separate institutions, each with a national presence.
  • Two loans originally totaling $7 million acquired with the merger with Stockmans in January, secured with undeveloped property. The Northern California property, comprising $2.3 million, has been foreclosed with a charge-off of $1.3 million and the remaining $1 million has been included in other real estate owned. The estimated loss on the Central California collateral has been increased to $3.1 million based on a recent appraisal.
  • A $3.1 million loan on Class A commercial office space in the Portland area. The loan-to-value ratio is less than 50 percent and also has a substantial second lien. Foreclosure has been initiated and no loss is expected.
  • A collection of loans totaling $3 million on an approved residential building project with lots and completed and partially completed residential units in Central Oregon. A small portion has been charged off based on falling property value.
  • Notes totaling $2.8 million for property acquisition, development and residential construction in Central Oregon, which recently have been reclassified as nonperforming. The bank has ordered new appraisals but doesn't expect a decline in value.

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