Central Bancorp in Somerville, Mass., said Tuesday that it lost $9.5 million in the quarter that ended Sept. 30 after taking a hefty impairment charge on its Fannie Mae and Freddie Mac preferred stock.
The $542 million-asset company reported a profit of $465,000 for the year-earlier quarter.
The Fannie and Freddie shares have lost most of their value since the mortgage companies were taken over by the government in early September, forcing hundreds of banks and thrifts to take impairment charges in their most recent quarterly earnings.
Central wrote off $9.4 million on the preferred shares in the quarter. Also contributing to the loss was a $900,000 provision to its loan-loss reserves.
The quarterly loss dropped the risked-based capital ratio of Central's thrift subsidiary to 9.12% of assets, meaning regulators now view it as adequately capitalized rather than well capitalized. Banks and thrifts with ratios at or above 10% are considered well capitalized.
Central is the second Massachusetts company to say this week that its risk-based ratio fell below 10% after taking impairment charges on Fannie and Freddie holdings.
Service Bancorp Inc. in Medway said Monday that the risk-based ratio at its Strata Bank now stands at 8.01% after it took a $6.6 million charge on its Fannie and Freddie shares, as well as a $1.9 million charge on investments related to Lehman Brothers bonds.
