Regents Bank reported first quarter net income of $560,000 compared with net income of $29,000 in the like quarter of 2010.

The low earnings last year were due to higher loan loss provisions the La Jolla-based lender had to put aside for problem loans. Those problems were reduced from $8.7 million to $3.9 million as of March 31, or 1.15 percent of total assets of $336 million.

Last year, Regents sold about $11 million in problem loans to an undisclosed buyer. It doesn’t have to disclose the gain or losses on the sale, but the portfolio was sold at market value, said Chief Financial Officer Randy Krenelka.

Total assets in the first quarter declined year over year 7.9 percent, while total loans were basically flat at $218.9 million.

The bank that received $12.9 million in federal funds through the Troubled Asset Relief Program fields excellent capital ratios, with its total risk-based capital at 17.98 percent. To be regarded as well-capitalized banks must have at least 10 percent in that measurement.

Krenelka said there’s no timetable to repay the money although it’s likely it will be repaid before 2014 when the interest rate on the money increases to 14 percent from the current 5 percent it’s paying.

CEO Dan Yates said lending demand locally is stagnant.

“A majority of our clients and companies that we call upon are not looking for additional credit as they either have sufficient cash reserves or do not need credit, given current business conditions.”

Loan originations for the first quarter were $12.9 million, compared with $18.5 million in originations for the first quarter of 2010.

— Mike Allen