Second National Federal Savings Bank will try to sell or restructure $50 million of problem real estate assets this year in a bid to nurse itself back to health and meet federal capital requirements set for 1994, the Annapolis-based thrift said yesterday.
But analysts said they didn't know what to make of the announcement. Because so little is known about Second National's portfolio, they couldn't tell whether the plan will work, they said.
"I hope they can" sell the properties, said David S. Penn, an analyst for Legg Mason Inc. in Baltimore. But, he added, "I have no way of knowing what they can sell, what they can't sell, and what financing the buyers can get."
Second National officials said they haven't decided which properties to sell or restructure in their $205 million portfolio of repossessed real estate and non-performing loans.
"It's a statement of intent more than anything else," said William T. Russell III, Second National's chief financial officer. "I think it's important to show the direction that you intend to take the company over the next year."
Henry A. Berliner, the thrift's president and chief executive, said the thrift will benefit from an improving housing market because the biggest part of the non-performing portfolio is loans on land slated for residential development. A stronger market will make it easier to sell those assets, or restructure bad loans so the original borrowers can afford to resume payments, he said.
But others are more skeptical that the thrift can get the prices it needs for the assets, especially given that, according to Mr. Russell, Second National had only about $43.6 million of reserves against the more than $200 million in problem assets as of Sept. 30. The size of the reserves will limit how much the thrift can cut the price of the assets in order to sell or restructure them.