Paso Robles-based Heritage Oaks Bancorp, the holding company for Heritage Oaks Bank and Business First Bank, reported a second-quarter loss of $5.8 million on Aug. 4.

That compares to a $507,000 loss in the second quarter of last year. The net loss applicable to common shareholders was $6.2 million, or 55 cents per diluted share, compared to $257,000 in the second quarter of 2009.

The bank said its most recent loss was largely due to a $16.1 million provision for loan losses, compared to $1 million in the first quarter. The loan loss provision was recorded along with $12.5 million in quarterly net charge-offs, debts the bank no longer thinks it can collect.

Heritage Oaks continues to work through its problem loans and “took an aggressive position with respect to reducing the level of non-performing assets,” President and CEO Larry Ward said in an earnings release. The bank increased its allowance for loan and lease losses by $3.6 million.

Pointing to balance sheet improvements such as a 28.4 percent drop in non-accruing loans and a 19.5 percent drop in total non-performing assets, Ward said “these trends are all indicative of the considerable effort that the bank’s management has made to systematically address the problem loans in its portfolio.”

Heritage Oaks’ tier one leverage ratio was 11.53 percent and its risk-based capital ratio was 16.46 percent at the end of the second quarter. The company also said it recently received regulatory approval for the remaining $4 million of its $60 million private placement.