Flagship Posts 2d-Quarter Loss
JENKINTOWN, Pa. - Flagship Financial Corp. announced a net loss of $2.6 million for the second quarter, after taking a loan-loss provision of $4.37 million.
The company also announced that it had been unable to reach a definitive agreement with a potential acquirer, the $1.3 billion-asset Sovereign Bancorp of Wyomissing, Pa.
Flagship's second-quarter loss compares with a net loss of $258,000 for the corresponding period a year earlier. On a pershare basis, the most recent loss totaled 75 cents, versus 7 cents a year earlier.
Construction Slowdown Cited
John M. Mason, president and chief executive officer of the $966 million-asset Flagship, attributed the loan-loss provision to a slowdown in certain residential construction projects and changes in the financial condition of certain larger borrowers.
Two construction loans were classified as in-substance foreclosures, representing $3.3 million of the total $3.6 million of charges taken in the quarter.
Nonperforming assets were $22.3 million, or 2.31% of total assets. That is down from a high of 2.83% on Dec. 31, and 2.71% on March 31.
The board declared its regular quarterly cash dividend of 10 cents a share.
Mr. Mason said that Flagship and Sovereign had terminated further negotiations after finding themselves unable to agree on a purchase price and other issues.
Flagship Financial conducts business through wholly owned subsidiaries First American Savings and Brandywine Savings Bank.