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Thursday, Mar 28, 2024

Bank Earnings Down, But Stock Price Rises

Shares of Beverly Hills Bancorp Inc., the holding company for Calabasas-based First Bank of Beverly Hills, shot up 68 percent the day after first-quarter earnings data was released despite mostly negative news. Net income in the first quarter was $1.8 million, or $0.10 per diluted share. That is a 31 percent drop form the net income of $2.6 million, or $0.14 per diluted share, in the same period of 2007. Non-accrual loans, those with principal and interest are unpaid for at least 90 days, increased sharply in the first quarter, jumping to $45 million. Construction loans make up 98 percent of non-accrual loans. BHBI had to set aside an additional $500,000 set aside for loan losses, the company said in its earnings release, and operating expenses increased in the period partially due to the costs of a legal battle with a former loan servicing subsidiary, as well as severance pay and other costs associated with staff cuts. A $300,000 decline in net interest income from 2007 to 2008 further damaged earnings. MarketWatch.com listed the company as one of the 10 worst-performing bank stocks over the past three months.

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