Baltimore Bancorp reports $69.6 million loss

January 28, 1992|By Ross Hetrick VtB

Baltimore Bancorp, the parent of the Bank of Baltimore, reported yesterday a loss of $69.6 million, or $5.46 a share, in the fourth quarter as the new management attempted to clear its books and add to reserves for possible loan losses.

The quarterly results boosted the bank holding company's loss for the year to $101.5 million, or $7.96 a share, against earnings of $9 million, or 71 cents a share, for 1990. In the fourth quarter of 1990, it lost $6.5 million, or 51 cents a share.

The loss pushed the bank's total capital-to-assets ratio below regulatory requirements for the first time. In response, Baltimore Bancorp plans to sell $376.1 million in assets and might seek an additional $15 million to $20 million in debt acceptable to regulators, the company said.

The fourth-quarter loss also included a $35.8 million after-tax charge to rid its balance sheet of goodwill. Goodwill -- the amount by which a company's purchase price exceeds its net worth -- is typically written off a buyer's books and deducted from earnings over a number of years.

Although the fourth quarter results were unusual for the generally profitable bank, analysts were not surprised because of the new management's restructuring plan.

"They were trying to write off the kitchen sink," said Elisabeth Albert Hayes, a bank analyst with Chapin, Davis, a Towson brokerage.

David S. Penn, a bank analyst for Legg Mason Inc. in Baltimore, said the figures were what he expected.

The large loss pushed the banking company's total capital down to 6.31 percent, below a regulatory requirement of 7.25 percent that took effect at the end of 1991. The two other measures of capital remained above the standards.

Bank officials met with employees to explain the financial condition.

Baltimore Bancorp

Three months ended 12/31/91

.............Income................. Share

'91..... (69,589,000)............... (5.46)

'90....... (6,530,000).............. (0.51)

% change..... NA...................... NA

............Assets.................... Deposits

'91..........3,211,293,000............ 2,947,978,000

'90 ..........3,523,429,000.............. 2,911,255,000

% change....... 8.9....................... +1.26

Twelve months ended 12/31/91

................Income..................... Share

'91........... (101,489,000)............... (7.96)

'90.............. 9,010,000 .................0.71

% change.......... NA....................... +NA

Loan portfolio

Three months ended 9/30/91

................Loans outstanding.............. Net charge-offs

'91.............. 2,121,915,000 ..............11,778,000

'90 ...........2,367,124,000................. 2,791,000

% change........ 10.4.......................... +322.0

..........Addition to allowance................ Allowance

..........for loan losses for loan losses

'91......... 49,816,000 ................110,036,000

'90 ............18,920,000............... 35,502,000

% change......... +163.3.................... +209.9

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