Madison National Bank, one of a group of new banks based on Long Island, reported its first profitable quarter, with earnings of $208,000, after a first-quarter loss of $778,000.
The Hauppauge-based bank was founded in 2007 and has branches in Merrick, Melville and Massapequa. It has assets of $305.1 million.
However, its proportion of bad loans grew to $12.4 million, up from $9.3 million in the previous quarter. Bank officials said in a statement that they are "aggressively addressing any issues arising during this difficult credit cycle."
The bank sold $20.7 million worth of apartment building loans, allowing it to continue concentrating on making commercial real estate loans. Meanwhile, on June 11, the bank entered into a formal agreement with its federal regulator, the Office of the Comptroller of the Currency, to limit loan growth in relation to Madison's capital levels. Much of the bank's loan portfolio is in rent-controlled and rent-stabilized apartment buildings in New York City.