Farmers Bank 1Q
Farmers Bank based in Frankfort had this to report: “The improvement in net income in the linked quarter comparison is mainly attributed to the goodwill impairment charge and overall higher expenses associated with nonperforming assets during the fourth quarter of 2009 (primarily the provision for loan losses) coupled with an increase in net interest income in the current quarter. Nonperforming assets were as follows for the periods indicated.
The increase in nonperforming assets was driven mainly by higher restructured loans of $24.4 million. The increase in restructured loans was boosted by a single residential real estate development credit in the amount of $10.7 million. Substantially all of the increase in restructured loans is secured by real estate. The Company is working diligently to identify which of its other challenged credits may merit a restructuring of terms in order to maximize loan repayments. Cash flow projections are carefully scrutinized prior to restructuring any credits; past due credits are typically not granted concessions.
The Company added $1.9 million to its provision for loan losses in the first quarter of 2010, a decrease of $4.6 million compared to $6.5 million for the fourth quarter of 2009. Net loan charge-offs were $1.6 million and $5.2 million in the current three months and linked quarter, respectively, a decrease of $3.6 million or 69.0%. Net charge-offs as a percentage of outstanding loans (net of unearned income) were .13% and .41% in the current and linked quarters, respectively.
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