A development loan to a Regency Homes subsidiary is not in default but has been classified as “special mention” by North Central Bancshares Inc., the parent company of First Federal Savings Bank of Iowa, the company said in its quarterly earnings report.

The company said $970,000 is outstanding on a loan for a residential development that consists of developed single-family lots and adjacent bare ground in a Des Moines suburb.

Because Regency announced April 25 that it had shut down its residential operations, the $970,000 remaining on a development loan was classified as special mention, North Central Bancshares said in the report. Special mention means that a loan is carrying slightly more risk.

North Central Bancshares said it has a total $3.8 million in first mortgage loans outstanding to Regency-related businesses on three commercial real estate loans and the residential development loan. The company said that all of the projects have sufficient collateral value to cover any amounts owed to First Federal Savings Bank of Iowa.

Earlier this week, West Bancorporation Inc., parent company of West Bank and WB Capital Management Inc., announced that it was increasing its provision for loan losses for the first quarter of 2008 by $5 million due to Regency Homes suspending operations.

West Bank has $22 million in loans to individuals or limited liability companies connected to Regency. Approximately $18 million of the loans are secured by first mortgages and limited guarantees from the owners of the borrowers. Loans totaling approximately $4 million are unsecured. None of these loans are in default, and several of the loans are believed to have collateral values sufficient to cover the amounts owed to West Bank.

Meanwhile, North Central Bancshares reported its diluted earnings per share for the quarter ended March 31 was 60 cents, down from earnings per share of 75 cents for the same quarter last year. The company’s net income was $804,000 for the first quarter this year, compared to $1.03 million last year.

The company’s provision for loan losses was $60,000 and $30,000 for the quarters ended March 31, 2008 and 2007, respectively.

Correction: The May 9 edition of the Business Daily incorrectly listed the source of a $6.1 million loan to Michael’s Landing LLC. The loan was issued in April 2007 by First Federal Bank, which later changed its name to Vantus Bank. The error was contained in an article about the first-quarter earnings report of First Federal Savings Bank of Iowa and its parent company, North Central Bancshares Inc., which have no connection to Vantus.