The privately held Vancouver-based bank booked costs of about $336,250 toward the construction and operation of its east county branch during the three months ending June 30. The branch, at 16409 S.E. First St., opened in March.

“The branch was the primary drag on income,” said Mike Worthy, chief executive officer of the bank, which had assets of $446.2 million at the end of the quarter. Low interest rates have also compressed profit opportunities for the bank, he said.

Rising mortgage defaults have not hurt the bank because it does not offer subprime loans and generally arranges mortgages through third parties.

Still, construction and development, business sectors that have  been contracting for months, are an area of concern. Loans in these areas make up a third of the bank’s loan portfolio.

The bank added another $165,000 to its loan reserves during its second quarter, after adding $2.5 million to the reserves over the preceding six months. These reserves exist to offset losses if a borrower defaults.

The Bank of Clark County has generally been able to reach new terms with struggling borrowers, Worthy said. It completed its first foreclosure, on a $195,000 property, during the quarter, he said.

“People are paying us back more slowly than we had hoped, but they are paying us back,” Worthy said.

COURTNEY SHERWOOD covers banking. Reach her at 360-735-4553 or courtney.sherwood@columbian.com.