Awash in at least $18.5 million in bad construction and development loans, Citizens Bank of Northern California lost $7.4 million or more during the last six reportable months, according to its own figures.

Federal regulators recently demanded that financial reports for 2008 and the first quarter of this year be redone, so the revised figures could be worse.

and#8220;I don’t have the numbers,and#8221; said Bank President and CEO Judy Hess on Monday. and#8220;We discovered things in the financials that might change the outcome, but I don’t have the liberty to give you the specifics.and#8221;

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Despite the bad news, the company remains well-capitalized, and each customer remains insured up to $250,000 by the Federal Deposit Insurance Corporation, Hess said.

The bank’s assets grew to $376 million on March 31, up from $344 million at the end of the first quarter in 2008, according to bank reports and#8212; although that figure also could change with the coming revisions.

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Bank officials must rewrite their financial reports because they did not include the deterioration of collateral used for loans and the borrowers’ financial conditions, according to Hess and a bank statement.

The discrepancies were discovered by an examination of the bank’s loans done internally and by regulators, according to Hess and bank reports. The bank is routinely audited by outside agencies and by the U.S. Department of Financial Institutions.

In a May press release, the bank announced it planned to dump $8.5 million into its loan reserves to keep ahead of defaults after the financial report came out for the first three months of this year.

In March, the bank reported a plan to put $4.9 million into the same reserves in response to the financial report for the last quarter of 2008. That is a total increase of $13.4 million in the loan reserves since March 6.

The revised numbers for the financial reports will be released to the public as soon as they are compiled, Hess said. Until then, the bank’s figures on earnings for 2008 and the first three months of this year and#8220;should no longer be relied upon,and#8221; according to a bank statement.

The board of directors at Citizens Bank includes Hess, Chairman Ken Baker of Hooper and Weaver Mortuary, John Casey of Caseywood Corp., Charles Litton Jr. of Litton Laboratories, Janie Marini of Marini Accounting, Wyn Spiller of Nevada City Winery and Gary Tintle of Tintle Inc., according to the bank’s Web site.

The bank, headquartered in Nevada City, was formed in 1995 and has branches in Grass Valley, Penn Valley, Lake of the Pines, Truckee and Auburn.

To contact Senior Staff Writer Dave Moller, e-mail dmoller@theunion.com or call 477-4237.