Losses Spur First National to Close Carlsbad Branch
First National Bank will close its Carlsbad branch Nov. 1 as part of the bank’s efforts to cut costs in light of growing loan problems and a large third-quarter loss.
The seven-branch bank, which closed its Riverside office earlier this year, Thursday announced a $5.5-million loss and an increase in its non-performing assets to $34.2 million, or 5.3% of assets, a level many analysts consider unhealthy. Souring business loans are at the core of the bank’s loan problems.
Nancy Celick, the bank’s chief financial officer, said Friday that the bank “cannot predict whether (non-performing assets) will increase or decrease at this time because of the economy. If the economy gets worse, they could increase. . . . We feel our capital ratios are very good and strong enough to carry us through these problems.”
Celick said cost reduction has been a goal of the bank for some time, adding that the bank’s payroll is now at 359 employees, down from 374 at the end of 1990.
The bank’s emphasis has changed from growth through making new loans to managing its problem assets, Celick said. The bank’s bad loans are now triple the amount as of June 30. The bank’s assets were $646 million as of Sept. 30.
The third-quarter loss, which reflects the findings of a recently completed examination by the federal Office of the Comptroller of the Currency, was blamed on San Diego’s deteriorating economy.
Some of the eight employees at the branch situated on Palomar Airport Road in Carlsbad are being given jobs at other First National Bank offices, Celick said. Shares of First National Corp., the bank’s parent, lost $.75 to close at $6.375 in American Stock Exchange trading on Friday.
