THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, October 20, 1994 TAG: 9410200351
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 53 lines
In its first earnings report since it became a public company, Life Bancorp Inc. announced Wednesday that its third-quarter profit slipped a little due to a one-time loss on securities sales.
Norfolk-based Life, which went public Oct. 11, is the largest financial institution with headquarters in Hampton Roads. It has 17 offices throughout South Hampton Roads. It had assets of $941.2 million and deposits of $591.8 million as of Sept. 30.
Life, the parent of Life Savings Bank, made $1.92 million in the quarter ended Sept. 30, 3.1 percent less than the $1.98 million it earned in the quarter a year ago.
The decrease in third-quarter earnings is directly attributable to a securities loss of $435,000 in the most recent quarter and securities gains in the year-earlier period.
``Once you back out that particular securities loss we had a heck of a quarter,'' said Tollie W. Rich Jr., Life's chief financial and operating officer.
The securities loss resulted from the sale of low yielding mortgage-backed securities. The year before, the thrift had substantial one-time gains on the sale of other securities and mortgage loans.
The savings and loan reported that its net interest income, or what it makes on loans and other earning assets, rose 1.7 percent in the third quarter compared to last year.
Through the first nine months of 1994, Life has made $3.74 million compared with $6.54 million in the same period of 1993.
Life attributes that 44.6 percent decrease in earnings to higher interest rates that drove up its costs on deposits, the securities activity and setting aside $1.07 million to cover loan losses.
A $1 million addition to loan-loss reserves in the second quarter brought the thrift's reserves into compliance with a newly issued bank regulatory policy.
``Our task now is to effectively deploy the substantially increased assets of the institution evolving from the recently concluded stock issuance,'' Edward E. Cunningham, Life president and chief executive, said in a prepared statement.
Those assets should make the fourth quarter pretty good for the savings and loan.
It added about $100 million of capital to its coffers as a result of the public offering. ``The entire earnings on that $100 million of free capital as I call it will fall to the bottom line,'' Rich said. by CNB