Despite having to sell nearly 20 repossessed long-haul trucks, South Sound Bank’s business is otherwise healthy, the president and chief executive of the Olympia bank said this week.
“The loans in production, if you will, are in better shape than they were five years ago,” Dan Yerrington said.
The $170 million bank has recently found success lending to owner-occupied projects — a business that owns its own property — as well as lending to local dentists after creating a special program for dental practices about a year ago, he said.
But for the moment there’s the matter of those 17 to 19 refrigerated long-haul trucks, which the bank is trying to sell to recover its share of costs associated with participating in three loans backed by the U.S. Small Business Administration.
Details of those loans were found in legal documents after the bank sued Par 4 Transport LLC of Rochester for failure to make payments on those loans, beginning in November 2014.
The lawsuit was filed in Thurston County Superior Court in March.
It was not immediately clear whether Par 4 Transport still is open. A call to the business was not returned Tuesday. Yerrington said the business has closed, but that the owners are part of a class action lawsuit against the truck manufacturer, alleging some defect in the truck that required regular repairs.
That alleged flaw since has been corrected in the repossessed trucks, he said.
The three SBA loans, which were originated in 2011, total about $2.4 million. South Sound Bank was responsible for about 10 percent of that total while the SBA provided the rest of the funding, Yerrington said.
The Par 4 trucks, which were used to transport produce on the West Coast, might fetch $100,000 each. If that happens, he said, 90 percent of the proceeds would be collected by the SBA, while the bank would get 10 percent.
Yerrington said he expects to break even on the money lent to the business.
SBA lending at South Sound Bank was more active when the economy was slower because the loans are guaranteed by the SBA, he said. Now that is not the case because the economy has improved and conventional lending has become competitive again, Yerrington said.