Perpetual Financial Corp., the parent company of Virginia's biggest savings and loan, said yesterday it lost $5.3 million in the third quarter, the latest in a series of financial setbacks at the thrift linked to the softening local economy and the area's sluggish real estate market.
For the first nine months of the year, Perpetual said it lost $67.3 million, compared with a $16.1 million profit (96 cents a share) in the first nine months of 1989.
In the Washington area, the magnitude of Perpetual's problems is equaled only by MNC Financial Inc., parent of three of the area's largest banks, which reported a $75 million loss in the first half of 1990. Both Perpetual and MNC have been battered by soured real estate loans and stricter standards by federal regulators.
Most of Perpetual's loss in the third quarter resulted from an $11 million addition to its loan loss reserves, the cash cushion that protects against possible loan defaults. Perpetual's nonperforming assets -- those that are no longer paying interest -- jumped $91 million in the quarter, bringing the level of troubled loans at the thrift to $334 million. In the year-ago quarter, Perpetual earned $5 million (29 cents).
However, Perpetual Chairman Thomas J. Owen said the savings and loan successfully resolved about $41 million of problem loans in the quarter.
"Despite a loss for the quarter, we can report positive results from the implementation of our previously announced business plan to restructure Perpetual into a stronger, more streamlined bank," Owen said.
After years of growth and diversification, Owen said in June that Perpetual plans to steer a new course back to home mortgages and consumer lending.
Biotech Research Laboratories Inc., based in Rockville, yesterday reported a second-quarter loss of $266,000, compared with a profit of $656,000 (10 cents) for the same period last year.
J. Bryan Dowling, the company's vice president of finance, attributed the loss to $745,000 in costs related to Biotech's acquisition by Cambridge BioScience Corp. of Worcester, Mass.
This will be Biotech's last earnings report as the company, one of the region's oldest and most successful biotechnology firms, is absorbed into Cambridge.
Biotech's second-quarter revenue decreased 17 percent to $3.9 million from $4.7 million last year.
For the first six months, the company reported a loss of $705,000, compared with a profit of $1.3 million (20 cents) for the same period last year.
Biotech's revenue for the six months decreased 27 percent, to $6.6 million from $9.1 million.
Biotech Research Labs develops and manufactures viral diagnostic products that detect AIDS and strains of leukemia.
VSE Corp., an Alexandria-based government contractor, said that despite a slight drop in revenue in the second quarter, net income increased to $561,000 (32 cents) from $27,000 (1 cent) in the second quarter last year.
Revenue in the quarter fell 6 percent, to $25.1 million from $26.8 million. The company said its profits improved because of cost-containment efforts and lower interest costs.
A company official also said profits rose because VSE's borrowing requirements dropped due to reduced business volume.
Revenue fell due to a decline in defense spending and increased competition in the government contracting business, it said.
VSE said revenue for the six months ending June 30 was $49.9 million, down 12 percent from $56.6 million last year. Net income was $1 million (58 cents), up 4 percent over $963,000 (53 cents) for the first half of 1989.