NorthEast Community Bancorp in White Plains, N.Y., plans to write off the only nonperforming loan on its books.
The $1.1 billion-asset company said in a press release Tuesday that the nonresidential real estate loan had a $3.6 million balance on June 30. It is secured by commercial real estate in Greenwich, Conn., and guaranteed by its two borrowers.
The loan, which is in foreclosure, is subject to Connecticut’s ongoing foreclosure moratorium and backlog.
NorthEast Community opted to write off the loan after an appraisal determined that the property’s value with an existing parking easement is zero. The company said it plans “to aggressively seek recovery of all amounts due from the personal guarantors of the foreclosed loan.”
As a result of the writedown, the company said it expects to record a third-quarter loan-loss provision for at least $3.5 million. The loan-loss allowance should have at least $5.1 million following the writedown and the provision.
NorthEast Community said that it expects to report third-quarter net income of $730,000, with not nonperforming assets in its portfolio. The company earned $3.7 million in the second quarter.