John Hanson Bancorp, unable to attract much-needed capital and suffering a large loss during the first three months of the year, has been placed under strict operating supervision by regulators because the company has fallen well below required capital levels.
The Beltsville-based thrift, owner of John Hanson Savings Bank FSB, said yesterday that it lost $22.3 million, wiping out the stockholders' equity in the company and leaving it with liabilities that were $1.1 million greater than its assets.
As a result, John Hanson -- the fifth-largest savings and loan in Maryland -- said it had signed a consent agreement with the Office of Thrift Supervision, the federal agency that oversees the nation's savings and loan industry, that could lead to the appointment of a conservator or receiver to operate the company.
Despite the company's difficult financial position, however, John Hanson remained open and operating yesterday with federal deposit insurance protecting accounts up to $100,000, said John V. Pollock, president and chief operating officer of the company.
Like most other lenders in the area, John Hanson blamed much of its financial problems on its inability "to stem the mounting losses that can be primarily attributed to the aggressive lending practices of the mid-1980s, which resulted in the Savings Bank having a significant amount of commercial real estate loans. [Those loans] have been severely affected by the depressed real estate and economic conditions of the past two years."
Yesterday's announcement did not come as a complete surprise. A week ago, the savings and loan, which has $840.8 million in assets, warned that it could be forced to sign the consent agreement if it was not able to raise an additional $10 million in capital by Wednesday, as stipulated in a previously approved plan submitted to regulators.
The thrift has been negotiating with various potential investors for some months but has been unable to close on a recapitalization plan.
Mr. Pollock said that some investors said they wanted to await the outcome of a regulatory exam, concluded this week, before they made a final determination whether to proceed with the capital infusion. Discussions with those prospective investors were continuing, Mr. Pollock said.
That regulatory exam led to an $18.8 million addition to the thrift's reserves to cover possible loan losses and real estate investments.
The consent agreement limits further lending activity to loans made primarily in the residential mortgage and consumer lending market.