People's of Connecticut Offers $200 Million in Card Assets
In an effort to beef up eroding capital, People's Bank of Bridgeport, Conn., has put $200 million of its $600 million credit card portfolio up for sale.
The sale announcement accompanied the report of a $41 million loss in the second quarter. People's shareholder equity now equals 4.96% of assets, versus 5.27% of assets on March 31.
The loss was spurred by a $48 million provision against loan losses. The bank also charged off $58 million in the quarter.
Nonperforming Assets Decline
People's has been hit hard by plummeting real estate values in Connecticut. It scored a modest victory in the latest period, however, recording a 3% decline in nonperforming assets from its March 31, level to $515 million.
With $312 million in shareholder equity, People's remains adequately capitalized, analysts say. And the sale of card loans would buy the company time to improve asset quality.
The sales price of card portfolios has fallen in the past year as offerings flooded the market. Currently, CoreStates Financial Corp. is looking for a buyer for $1 billion of its card loans.