COLUMBIA, S.C. - Resource Bancshares Mortgage Group reported a net loss of $24.9 million for the third quarter, or $1.43 per share, the company's fifth straight quarter in the red.
Resource attributed most of the loss, reported Wednesday, to a $20.1 million writedown of its residual interests in subprime securitizations. The writedown was the result of the company's agreement, announced this month, to sell 100% of the residual assets of its six subprime securitizations. Several analysts praised the move despite the immediate hit to earnings.
The third quarter brought Resource's losses to $39.1 million for the year, and $47.7 million for the last five quarters. Resource last reported net income in the second quarter of last year.
Resource officials said a challenging mortgage environment also hurt the company's performance but that they believe the company will move toward profitability in the current quarter.
"We can't afford to wait for margins to normalize in order for us to return to profitability on the agency-eligible side," said Douglas Freeman, chief executive officer of Resource Bancshares. "We will continue to aggressively manage our cost structure and learn how to be profitable even in a tight-margin environment."
Steve Herbert, Resource's chief financial officer, said the company is in the midst of several strategic changes, including adding secondary marketing technology, modifying its warehouse lending process, and improving its cost management.
"The impact of these strategies will be seen in the fourth quarter and beyond," said Mr. Freeman.
Compiled by Robert Julavits
