BOSTON, AUG. 3 -- Bank of New England Corp., which has shrunk under the weight of troubled real estate loans, said today it lost more than $33 million in the second quarter.
The financial report is the latest gloomy financial news for the banking company, continuing a tumble that began late last year. The company lost more than $1 billion in 1989, and $46.6 million in the first quarter that ended March 31.
In the second quarter, which ended June 30, the banking company lost $33.3 million (49 cents per share), compared with earnings of $36.5 million (52 cents) in the same period a year earlier.
Bank Chairman Lawrence Fish said in a statement that the company has made "slow but steady progress" in trying to recover.
But he said the loss was not unexpected "because of the continued sluggishness in the region's economy, the softness in the real estate market and lower net income."
The losses, in part, reflected how the bank has had to divert money into reserves to cover bad loans.
The bank's total nonperforming assets, which include troubled loans, totaled $2.78 billion, compared with $2.67 billion in the first quarter.
Gerard Cassidy, a bank analyst with Tucker Anthony Inc., said the bank's assets were not deteriorating at the same rate as in the past.
"But when you're at these levels, you need to see reduction in nonperforming assets, not smaller increases," he said. "Overall, the numbers are a continuation of a negative trend."
Nonperforming assets are loans that are not earning interest.
Bank of New England has been operating under federal orders since early this year. The bank came under heightened government scrutiny when a downturn in the economy and the real estate market exposed mountains of bad loans.
Part of the bank's strategy has been to sell off assets and slash its work force to cut costs and raise money.
The bank has reduced its work force by 4,000 through a combination of layoffs, attrition and sale of assets. Since the beginning of the year, the bank has sold more than $5 billion in assets, said spokesman James Dorsey.
The company has decided not to sell it subsidiary bank in Maine, but is continuing discussions with possible buyers for its Rhode Island subsidiary.
The bank had been borrowing money from the Federal Reserve Bank of Boston to meet immediate cash needs but stopped in mid-June.