A one-time $75 million goodwill write-down, along with a $28 million deferred tax credit write-down gashed a hole in PremierWest Bancorp's bottom line for the fourth quarter of 2009.
A one-time $74.9 million goodwill write-down, along with a $29.7 million deferred tax credit write-down gashed a hole in PremierWest Bancorp's bottom line for the fourth quarter of 2009.
PremierWest Bank's parent company reported a loss of $110.6 million, or $4.46 per share, compared to a loss of $11.3 million, or 47 cents per share, for the same period in 2008.
"It has no impact on our cash or liquidity," said Jim Ford, the bank's president and chief executive. "All it did was reduce the numbers on our balance sheet."
Ford said the Medford company's losses from the past five quarters will provide a tax credit against future profits.
"We saw we wouldn't likely be able to use it in the fourth quarter," he said. "While it's eliminated from the balance sheet we still have it as a (tax) credit toward the future as we build earnings later in 2010, 2011 and on into 2012. Because of the credit, our pretax earnings will effectively be our bottom-line earnings."
The goodwill from PremierWest's acquisitions of Oregon and Northern California banks during the past decade is no longer on the books. PremierWest also boosted its loan loss reserve to $45.9 million, equalling nearly 4 percent of its loans.
"It's one of the highest (reserves) in the West," Ford said. "Most of the other banks we look at are around 2 percent. This protects our investors from future losses."
The company posted a loss of $148.6 million for 2009, or $6.01 per share. In 2008, it lost $7.8 million, of 34 cents per share.
Ford said nearly 40 percent of the bank's loans classified as nonperforming are still earning interest or interest and principal.
PremierWest earned $364,000 from the sale of $4 million of real estate it owned from defaults or foreclosures.
"A lot of the properties we started seeing going into foreclosure in 2008 came to fruition in 2009, and we expect it to continue into 2010," Ford said.
Investors took the news in stride, as PremierWest shares bounced between a high of $1.63 and $1.37 before closing at $1.49 — the same price as Wednesday. On a typical NASDAQ trading day, 110,000 shares exchange hands. There were 436,655 shares traded on Thursday.
Reach Mail Tribune reporter Greg Stiles at 541-776-4463 or firstname.lastname@example.org.