Malvern looking to sell another troubled CRE loan

Troubled commercial real estate loans drove a loss in Malvern Bancorp Inc.'s most recent earnings period, and the community bank is looking to offload another nonperforming loan.

The Paoli, Pa.-based lender, parent of Malvern Bank NA, on Dec. 14 reported a net loss of $6.2 million, or 82 cents per share, during the fourth fiscal quarter. Net charge-offs totaling $10.8 million sent the bank's earnings into the red.

Three CRE loans were behind the charge-offs: one nonaccrual loan with a book balance of $12.2 million and two loans in troubled debt restructuring totaling $17.1 million.

"Disposing of these loans was a necessary step towards formulating a stronger company by allowing management to shift its core focus from credit resolution to the continued implementation of the company's business plan," CEO and President Anthony Weagley said in the earnings release.

The bank previously disclosed that the loans were in trouble and would require a write-down. In the earnings release, management said the company transferred another commercial real estate loan to held-for-sale. That loan carries a book balance of $13.6 million, is in nonaccrual status and backs a property in the New York City metropolitan area.

Malvern has been struggling with impaired commercial real estate loans in New York City since the beginning of 2021, and in March, the bank hired activist investor Larry Seidman as an adviser.