First United Savings Bank said it will post a "substantial loss" for the year after writing off $1.4 million in a condominium project.
The $133 million-asset thrift, based in Greencastle, Ind., has also hired McDonald & Co. Securities to explore merger possibilities.
The thrift said it had been approached by "certain financial institutions" concerning a possible merger or business combination.
Mark A. Dennis, First United's vice president and treasurer, declined to name the interested parties.
Many Potential Suitors
Bud Gremel, vice president at City Securities Corp., Indianapolis, who makes a market in First United's stock, said the bank's potential acquirers are vast.
"There's obviously a lot of possible people, because it [the thrift] is not very big," he said.
Meanwhile, First United expects to take a loss for its year ending June 30 from a one-time condominium chargeoff in its fourth quarter.
The company did not specify the amount it would lose for the year.
The charge results from the bank's plan to eliminate its interest in a condo development project it inherited in a 1988 acquisition.
Back to Basics
After weighing developing and selling the final phase of the project against selling the undeveloped land, First United opted to sell the 8.2 acres and limit its losses.
Company officials indicated that they believe that the write-off will put it in a better position to merge.
"Things had changed enough where we now have to get hack to the business of banking, take our licks and go on," Mr. Dennis said.
After recording the adjustment, the bank still will exceed regulatory capital requirements, said president and chief executive William M. Marley in a statement.
For its quarter ended March 31, First United reported a return on assets of 0.40% and a return on equity of 4.78%.
