Spokane-based Northwest Bancorporation, Inc., the bank holding company for Inland Northwest Bank, today reported a net loss of $249,000 for the second quarter of the year, compared to a profit of $269,000 for the same quarter in 2010.

After accrual of dividends on preferred stock and related adjustments, the net loss for common shareholders was $418,000 compared to a profit of $100,000 a year ago.

This represents a loss of 14 cents per share for the quarter, compared to a gain of 4 cents per share in the second quarter last year.

Randall L. Fewel, President and CEO of the company and the bank, said in a prepared statement, "The road to full recovery from the worst recession in 90 years is indeed a long and bumpy one. As a result of a higher level of charged-off loans, and after an analysis of the adequacy of the loan loss reserve, management decided to expense $1.5 million into the reserve during the second quarter this year compared to $950,000 during the same quarter last year. That difference of $581,000 drove the decline in profitability for the quarter."

Fewel said on a positive note, total impaired loans decreased $3.7 million, or 10.1 percent, from Dec. 31, 2010, to June 30, dropping from $37.2 million to $33.5 million. Also, foreclosed real estate dropped $634,000, or 16 percent during that six-month period, from $4 million to $3.3 million, he noted.

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