Northeast Federal Corp., parent of one of New England's biggest thrifts, said Monday that it lost $9.4 million in the second quarter as a result of an $18 million provision for future loan losses and for writeoffs related to foreclosed real estate that it plans to sell.
The Hartford, Conn.-based company, whose Northeast Savings subsidiary has 53 branches and several nationwide mortgage lending offices, also said that it planned to file a rights offering proposal that could raise up to $60 million.
Big Property Sale
The quarterly loss compares with a gain of $158,000, or 21 cents a share, for the second quarter of 1992.
Although Northeast meets regulatory capital requirements, it has struggled with loan problems.
The thrift said it plans to sell up to half of its, foreclosed residential real estate soon in a single transaction. A company spokesman said about $30 million to $40 million of foreclosed property -- which already has been marked down about 10% -- is to be sold at about 45% of its carrying value.
In a prepared statement, Northeast chairman and chief executive George Rutle said the "accelerated disposition of nonearning assets and a capital infusion through the rights offering should dramatically speed up the return to profitability."
The company, which has $4 billion of assets, took a $6 million provision during the quarter to facilitate the bulk sale.
Northeast set aside $12 million for potential loan losses during the second quarter versus $2.5 million a year earlier.
Its total allowance on June 30 was $28 million, up from $18 million a year earlier.
Its total nonperforming assets fell 9% from the end of the first quarter to $178.3 million.
In early afternoon trading on the New York Stock Exchange, Northeast shares had lost 37.5 cents, changing hands at $4.375 a share.