Friday, Nov. 06, 2009

Woes persist for Myrtle Beach bank

Beach First National Bancshares, Inc., the parent company of Myrtle Beach-based Beach First National Bank, suffered more losses in the third quarter, in part because of the continuing decline in real estate values, the bank reported Thursday.

The company said it had a net loss of $14,197,821, or $2.93 per share.

The losses were affected by an $8.2 million noncash charge related to future income tax valuation.

The bank also increased its reserve for potential loan losses to almost $15 million.

"Our operating loss this quarter was similar to the first and second quarters and continues to be a reflection of the real estate market on the coast and especially in the Myrtle Beach area," said Walt Standish, the president and CEO of Beach First.

"Our customers are still struggling to sell, especially commercial real estate, and we continue to work with them to get them back to where they can repay some of the losses we have recognized."

The bank hired Sandler O'Neill + Partners, an investment banking firm, to help the company analyze alternatives, such as the sale of assets, restructuring of balance sheets or potentially merging with another company, to help improve the bank, Standish said.

Last year, federal regulators with the Office of the Comptroller of the Currency told Beach First that it had to increase its financial liquidity, reduce its high level of credit risk and improve administrative oversight or face sanctions.

On Thursday, the bank announced that it has signed a consent order, similar to a document signed with the OCC last year, that details what the bank needs to do to strengthen its financial condition and operations.

"It's another way for the OCC to work with us to make sure that we are making progress to ensure the safety and soundness of the bank," Standish said.

Shares of Beach First closed Thursday up 8 cents to $1.08.