Perpetual Financial Corp., continuing its long bout with souring real estate loans, said yesterday it expects an additional loss of $31 million for the quarter just ended and warned that it could fall below regulatory capital requirements if its losses continue unabated.
The latest report for the company -- the largest thrift in the Virginia-Maryland-Washington region -- continued this year's unbroken string of troubling financial reports. Not including its latest losses, Perpetual, based in Vienna, Va., had lost $67.3 million during the first three quarters of its fiscal year.
In its statement, made after the markets closed yesterday, Perpetual blamed the loss primarily on the addition of $35 million it set aside to cover problem loans during its fourth quarter, which ended Sept. 30, and a loss of about $15 million in its real estate investment activities.
The losses stemmed, in part, "from the continuing deterioration in the metropolitan Washington real estate market," the company said.
Perpetual, with $5.2 billion in assets, owns Perpetual Savings Bank, F.S.B. Its stock, traded over the counter, closed at 75 cents a share yesterday, up 12.5 cents. Perpetual has about 13.8 million shares outstanding.
Yesterday's announcement came one week after the company said itwould begin a sweeping reorganization in an attempt to save more than $20 million over the next year. The company said it would eliminate more than 145 jobs, affecting more than 110 employees, about 10 percent of the work force. The company eliminated about 200 unfilled positions earlier this year.
The company also said last week that it would temporarily stop the payment of dividends on its 8.5 percent cumulative convertible preferred stock, series A.
Perpetual said yesterday that its non-performing assets are expected to total $401 million when it reports its figures for its latest quarter. That would be an increase of $66.7 million from the amount of troubled assets for the previous three months.
The company also said that its parent company contributed $14.5 million of its $26 million in excess capital to Perpetual Savings Bank to help the thrift meet capital levels setby federal regulators and that the thrift continued to meet all capital requirements. However, the company said subsequent compliance could be in peril if the real estate market weakens further and additional loan-loss provisions are needed.
Perpetual's stockholders' equity totaled $220 million, or 4.2 percent of total assets, as of Sept. 30, the company said.