Quarterly Results Mixed For 3 Thrifts in N.Y. Area
Three big New York City-area thrifts reported widely varying third-quarter results on Thursday, with one suggesting that it was on the auction block.
American Savings Bank, a major thrift based in the Westchester suburb of White Plains, said it lost $70.7 million in the third quarter, wiping out its regulatory capital.
The $3.7 billion-asset thrift said it has retained the advisory firm of Lyons, Zomback & Ostrowski "to seek outside capital, which might include merger or sale of the bank."
Dime Reduces Its Loss
Manhattan-based Dime Savings Bank of New York reported a loss of $4.5 million for the period, against a loss of $153.6 million a year earlier. The thrift has suffered from sour home loans,
Dime, with $10.3 billion of assets, said its risk-based capital ratio of 6.77% failed to meet the regulatory minimum of 7.2%. It attributed the quarterly loss to a $33.7 million addition to loan loss reserves, which was offset in part by a $22 million gain from the sale of some adjustable-rate mortgage-backed securities.
Another major New York thrift, Anchor Savings Bank, said that that third-quarter earnings nearly tripled, to $17.1 million, bringing it into compliance with capital rules. Anchor had been struggling to meet the rules for two years.
Problems in Common
American, like a number of other banks and thrifts in the New York area, has been hobbled by nonperforming commercial real estate loans.
In the third quarter, it set aside $61.1 million against possible loan and asset losses, up from $2.1 million a year earlier.
The thrift had predicted the big provision in late September, after conducting what it called "an intensive analysis" of its portfolio.
The $71-million deficit at American reduced Tier 1 Capital - mainly common equity and certain forms of preferred stock - to negative $1.8 million from $72.3 million at midyear.
Regulators Called Supportive
W. Ronald Dietz, who became chief executive of American in July, said that regulators were "supportive" of the thrift's efforts to increase capital.
"We have a common understanding of what the process should be and the time it will take," he said in an interview.
The capital-raising plan includes an effort to convert $68 million of cumulative preferred stock into securities that count toward Tier 1 capital.
"An enormous number of good things are happening at the bank," Mr. Dietz said. "We just have to get a little gas in the tank and fly this baby."