BSD Unit Making Bond Provision
SAN DIEGO - BSD Bancorp said its subsidiary, the Bank of San Diego, will make a special reserve provision of $680,000 during June to reduce the carrying value of two municipal bonds to market value.
The provision is expected to result in BSD's reporting "minimal earnings" for the second quarter. The company, which has $458 million in assets, earned $1.3 million in the 1990 second quarter.
The bonds were issued by municipal agencies in Nebraska and in El Paso, Texas, and are backed by guaranteed insurance contracts issued by Executive Life Insurance Co., which was placed under conservatorship by the State of California.
James S. Brown, chairman of BSD Bancorp, said the bonds carried a Standard & Poor's rating of AAA when purchased in 1988. "These bonds are included in the portfolios of numerous banks across the country," he said. "We anticipate other banks will take similar action in the future."