Essex Bancorp of Virginia Beach, Va., hasn't been profitable recently, but it's not for want of effort - and innovative effort at that.
The beleaguered thrift company's latest attempt to resurrect its capital involved the March 15 sale of its retail branch in Charlotte, N.C, for a quick $1.3 million gain.
The sale to the Bank of Mecklenburg is consistent with the $339 million- asset company's strategy of centralizing its operations in the coastal Virginia area. But more importantly, the thrift expects the proceeds will put it in the black for the first quarter.
Gene D. Ross, the turnaround expert who was hired nearly four years ago to bring the company back to life, said in a press release that the sale should "reposition and more centrally locate the bank's retail banking franchise to achieve improved profitability and franchise value." He would not comment further.
Profitability and franchise value have not been seen at the company for some time.
Its fourth-quarter loss of $341,000 was an improvement from the same period of 1994, when the loss was $2.2 million, before extraordinary items. The fourth-quarter numbers included the results of Home Bancorp, which Essex acquired last fall. For 1995, Essex suffered a consolidated net loss of $1.2 million.
On the bright side, the company's nonperforming assets decreased during the year by 18%, to $11.3 million.
That the company is putting up any numbers at all, even negative ones, was good news, given that Essex was just days away from being seized by regulators last summer. Its core and risk-based capital ratios at the time were 2.93% and 6.28%, respectively, well below the required minimums of 4% and 8%.
The Office of Thrift Supervision was prepared to seize the institution last June 30 if a required $15 million of capital had not been raised. On July 3, Mr. Ross made the surprise announcement that Essex had not given up but, rather, had acquired another thrift, Home Bancorp.
The unusual deal, made through preferred stock and warrants, gave Essex the capital needed to survive, at least for the time being. Analysts described the maneuver as risky, desperate, and innovative.
In a sign that it is looking for a buyer, Essex disclosed this month that its board had formed a special committee to "review strategic alternatives to enhance shareholder value." It said it is evaluating "corporate restructurings" as well but would not elaborate.
Essex stock, which is listed on the American Stock Exchange, is currently trading in the mid-$3 range. It has fallen below $1 and risen as high as $5.50 in the past 12 months.
