The Fort Worth-based provider of financial services, including factoring, KBK Capital Corporation, announced on 6 April that they expect to be unprofitable in the quarter ended March 31, 2001, due to a specific increase in its loan loss allowance totalling approximately $6 million.
The anticipated $6 million addition to loan loss allowance is related to deteriorating conditions surrounding asset-based loans to three customers, including one which filed for bankruptcy during the first quarter. Although KBK will aggressively pursue the collection of its principal on these loans, the Company believes that it is prudent to establish an allowance equivalent to the maximum amount that management estimates it could lose under the circumstances.