Patapsco Bancorp Inc. in Dundlak, Md., said Tuesday that higher expenses and trouble with a large loan slashed earnings for the quarter ending Dec. 31 by 82% from the year earlier, to $64,000.
Earnings per share fell 84%, to 3 cents.
The $255 million-asset company attributed the earnings decline for its fiscal 2008 second quarter partly to expenses related to an agreement to sell itself, which was terminated this month.
It also cited a more than fivefold increase in its loan-loss provision, to $450,000, and a significantly higher tax rate.
Patapsco agreed in March to be acquired by Bradford Bancorp Inc. of Baltimore for $45.5 million in cash and stock. The deal fell apart when the $578 million-asset Bradford was unable to complete an initial public offering because of weak investor demand. Bradford had planned to use the proceeds to pay for the deal.
Patapsco said it expects to receive a $2 million termination fee from Bradford this quarter.
The company reported that in December it placed a $1.8 million development and acquisition loan on non-accrual status. Its ratio of nonperforming assets to total assets was an annualized 0.90% at Dec. 31, up from 0.19% at June 30.
Because of an increase in nondeductible expenses from the terminated merger, its effective tax rate increased to 68% during the three months ending Dec. 31. That is up from 37.6% for the same period in 2006.
Patapsco said it had $119,000 in merger-related expenses for the quarter ending Dec. 31.
Its thinly traded stock was unchanged Tuesday, at $11.30.
