Second National Bancorporation, just days after the completion of a federal exam, said yesterday that it lost $21 million in the third quarter after making a large addition to its reserves for souring loans.
The quarterly loss for the parent of Second National Federal Savings Bank pushed a third key financial ratio slightly below levels required by regulators.
In response, Second National said that it expected to revise this month a plan it signed with regulators in March to restore the health of troubled thrift.
Henry A. Berliner Jr., Second National's president and chief executive officer, gave an unusual indication that the company and federal regulators, who completed their annual examination of the thrift this week, did not see eye to eye on the issue of additional reserves.
"While current economic conditions make it difficult for banks and regulators to agree on the fair market value of certain types of real estate," he said, "we believe the additions to our loan reserves combined with operational changes will assist in restoring profitability."
The third-quarter loss extended more than a year of real estate woes at the $1.7 billion savings and loan, which is jointly based in Salisbury and Annapolis. The thrift has 34 offices in Maryland, Delaware, Pennsylvania, Virginia and Washington.
The company, suffering from the same weakness in the market that has hurt many banks in the region, has lost $44 million in the past 15 months. During the same time, the level of problem assets -- composed primarily of loans -- more than tripled to $201 million, nearly 12 percent of its total holdings.
The only bright spot in the report was that the rate at which bTC loans were going bad eased over the last three months, increasing only $6 million in the quarter.
"The uncertain economic recovery and restricted credit availability contribute to the continued deterioration of the commercial real estate markets in the mid-Atlantic region," Mr. Berliner said.
During the three months that ended Sept. 30, Second National lost $2.85 a share. It lost $2.33 a share in for the same period a year ago.
Second National added $29.7 million to its loan-loss reserves during the quarter, increasing the reserves to $43.6 million.