Hanson suffers $8.2 million loss

September 11, 1990|By Ross Hetrick | Ross Hetrick,Evening Sun Staff

Efforts by John Hanson Savings Bank F.S.B. to raise its capital levels to meet federal requirements have been dealt a setback by a loss of $8.2 million, or $1.42 per share, during its fourth fiscal quarter that ended June 30.

Before the fourth quarter loss, announced yesterday, the thrift was in compliance with two of the three measurements of capital established by the federal government. Now the Beltsville-based savings and loan is in line with only one of those standards.

John Hanson, which had total assets of $888 million and $H deposits of $685 million at the end of June, has 14 branches in Maryland and one in Delaware.

In the previous fourth fiscal quarter that ended June 30, 1989, the thrift saw a loss of $9 million, or $1.56 per share.

For the entire fiscal year, John Hanson lost $7.9 million, or $1.37 per share, a 5 percent improvement over the 1989 fiscal year when the company lost $8.3 million, or $1.45 per share.

Part of the fourth quarter loss was caused by a $5.4 million addition to its reserves for possible bad commercial real estate loans. The thrift also said it lost $3.8 million from the handling and revaluing of foreclosed real estate.

Net interest income also dropped by $3.4 million because of lost interest on non-earning assets.

The loan loss reserve, which is set aside as protection from possible future loan losses, now stands at $7.3 million. But non-performing loans total $23.7 million.

L Real estate owned through foreclosure totaled $20.5 million.

Under federal regulations adopted at the end of last year, standards were set for tangible capital, core capital and risk-based capital.

Tangible capital is defined at the common stock plus retained earnings. The common stock refers to the amount of money investors have in an institution in the form of stockholder's equity.

Core capital consists of tangible capital, goodwill and the rights to service existing mortgages. Goodwill, which is an accounting term, is the difference between what an investor has paid for another thrift and its actual value. Goodwill can also be created when a thrift converts from a mutual organization to a stock company.

The third standard of capital is risk-based capital, which measures the amount of capital in relation to the riskiness of assets. There are five risk categories ranging from zero percent for cash to 200 percent for certain delinquent loans and repossessed property.

The federal standards for the three categories in relation to total assets are: tangible capital, 1.5 percent; core capital, 3 percent; and risk-based capital, 6.4 percent. As of June 30, John Hanson's capital ratios were: tangible, 1.53 precent; core capital, 2.34 percent; and risk-based, 4.06 percent.

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