Shares of Opus Bank fell hard Monday after the Irvine, Calif., company warned that it will report a third-quarter loss due to credit issues.
The $7.5 billion-asset bank said in a press release that it expects to report a loss of 5 cents a share, reflecting $38.8 million in chargeoffs tied to eight loans in its technology, commercial and specialty lending divisions.
The company's shares fell more than 15% in early trading Monday.
Opus said the loans have been influencing the size of loan-loss provisions for the last eight quarters. The bank had previously set aside $16.7 million to cover the relationships.
Two of the loans, along with $22.2 million of chargeoffs, are tied to Opus' technology banking division. Opus noted that it has been deemphasizing that business. The other loans had $16.6 million of chargeoffs.
Nonperforming assets fell 44% during the third quarter, to $44.8 million, or 0.58% of total assets. Delinquencies fell 55% to $21.7 million. Criticized loans rose slightly, to $147.4 million.
