Enlarge
Mark Freerks
Helm Bank USA earned $9 million in the second quarter, although most of that came from a deferred tax asset gain.
Helm Bank USA enjoyed a burst of income in the second quarter, although its problem loans more than doubled.
The Miami-based bank is a subsidiary of Grupo Helm, which owns several banks in Latin America, and it deals mostly with foreign clients. Lending to condo buyers is one of its specialties.
Helm Bank USA earned $9 million in the second quarter, up from earnings of $1.4 million in the first quarter. Its second quarter results including a gain of $8.1 million from recognizing a deferred tax asset. Helm Bank USA CFO Maria Ortiz said this non-cash gain occurred because on Jan. 1 the bank converted from an S Corp, where shareholders pay its taxes, to a C Corp, where it is allowed to accrue a deferred tax benefit.
Its net interest income slipped to $6.9 million in the second quarter, from $7 million in the first quarter. It also withdrew $1.5 million from its loan loss reserves in the second quarter and counted that as part of its profit.
While its reserves were lowered, its level of problem loans increased. Helm Bank USA had $11.3 million in noncurrent loans, or 2.68 percent of total loans, on June 30, up from $4.4 million, or 1.04 percent on March 31.
The bank held $11.2 million to reserve for future loan losses on June 30. Going into this situation with considerable reserves certainly helped.
Helm Bank USA was the 16th-largest bank based in South Florida on March 31 with assets of $848 million. By June 30 its assets were down to $816 million.
Its deposits declined to $730 million on June 30, from $760 million on March 31, a trend that has continued since the bank signed a regulatory order criticizing its Bank Secrecy Act and anti-money laundering compliance in the fourth quarter.
Brian Bandell covers banking, finance, health care and education. Get the latest banking industry news here.
