The bank's non-performing assets consist of about 50% income-producing properties and 50% construction lending, says CFO Tim Doyle. "The commercial stuff I'm concerned about, but we know we'll be OK because we loan in markets where there's high demand in real estate," Doyle says, adding that the bulk of the bank's commercial loans are in the Western US, including San Francisco, Los Angeles and San Diego.
While there are "People sitting on the sideline," Doyle says, "I don't feel that we're going to have a lot of credit losses associated with income-producing properties. Our feeling is that income properties are situated in markets where there's going to be demand for those properties."
As for residential related construction lending—in residential, the bank focuses on land development loans, track residential development, condo conversion and ground-up condo project loans—it may take time to recover from ongoing losses, but Doyle sees long-term stability.
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