Riggs National Corp.'s money-laundering problems, which included a $25 million fine and the loss of its embassy banking business, cost the D.C. banking company at least $40 million in the second quarter.

As a result, Riggs is likely to report a hefty loss when it releases its results for the quarter ended June 30, which could be as soon as Monday.

In addition to the record fine assessed by bank regulators in May for failing to follow anti-money-laundering procedures, the bank's bottom line also will be eroded by other costs, which the bank has announced previously. These include a charge of between $15 million and $21 million to account for the costs of exiting its embassy and international banking divisions -- not to mention a pile of bills from lawyers and consultants hired to help Riggs with the fallout from the scandal.

"The numbers will be pretty awful," said Gerard S. Cassidy, who follows Riggs for RBC Capital Markets. "There will be a number of one-time items that will cost them a fair amount of money."

The shrinkage in the bank's deposits will also lead to a reduction in assets of at least $185 million.

Riggs's core banking operations -- aside from the one-time charges -- aren't expected to be a bright spot, either, said Gary Townsend, a bank analyst at Friedman, Billings, Ramsey Group Inc. He said he expects earnings before the one-time charges to be about 5 cents a share, the equivalent of about $1.5 million. But with the charges, he expects Riggs to lose about $34 million.

"It's going to be an ugly quarter," he said.

Riggs, which has agreed to be acquired by PNC Financial Services Group Inc. of Pittsburgh for about $700 million, will be a significantly smaller company. The bank has said that its decision to exit or sell its embassy and international business will eliminate about $1.05 billion of deposits -- about a quarter of its entire deposit base. Included in that is about $360 million from one customer, Equatorial Guinea, which was told by Riggs officials in February to take its business somewhere else after internal investigators -- acting after banking regulators raised concerns -- found evidence of potential money laundering by the country's ruling family. Equatorial Guinea had been with Riggs for nearly 10 years, and it was the company's biggest depositor, most of the money coming from huge contracts for oil extraction off the coast of West Africa.

Its dealings with Equatorial Guinea as well as its deposit relationship with the embassy of Saudi Arabia led to the $25 million fine. Riggs had failed to file reports of suspicious transactions involving those customers. Subsequent inquires by Congress, including a July 15 report issued by the Senate permanent subcommittee on investigations, showed that for at least six years, Riggs had been chronically noncompliant with laws designed to prevent money laundering. The Senate report also detailed Riggs's efforts to hide as much as $8 million deposited by former Chilean dictator Augusto Pinochet from international prosecutors seeking to freeze his assets. The revelations have sparked government investigations in Chile into the sources of Pinochet's personal wealth.

Riggs spokesman Mark N. Hendrix said the embassy banking continues to be wound down. Riggs said it would cover embassy and international deposit withdrawals with other deposit funds, its securities portfolio and its lines of credit. Riggs is well-capitalized and has ample sources of cash to meet the withdrawals, Hendrix said.

When Riggs first began informing embassies they needed to take their business to other banks, it sparked a mini-crisis in the diplomatic community, because few other banks were willing to take the business, deeming it too risky. A June effort by the State Department and the Department of the Treasury to assure banks that embassy business isn't automatically high-risk apparently yielded results. Both the embassies of Equatorial Guinea and Saudi Arabia have established new local banking relationships, though spokesmen for both embassies declined to say with which banks.

"We did at last find a bank, and we're very satisfied," said Saudi embassy spokesman Nail Jubeir.

When the bank reports earnings, it will be difficult to determine if Riggs has lost individual accounts because of the adverse publicity from the scandal, Cassidy said, because the company usually doesn't break out those deposits. "I'd be surprised if the retail business shows any loss in business, even though the headlines haven't been positive," he said. "People who have less than $100,000 in deposits don't need to worry," he added, referring to federal deposits insurance that covers up to $100,000 for each depositor.

Other items that will add to its one-time costs are expenses associated with finding buyers or closing a host of international branches and divisions it used to service foreign customers and embassies. Included in these are Riggs Bank Europe Ltd., Riggs Bank & Trust Co. (Channel Islands) Ltd., and Riggs & Co International Ltd. Riggs has said it will keep a "select base" of embassy customers and hold onto its London branch.

Riggs's moves to exit these businesses are also part of its agreement with PNC. Before that deal can be closed, which is scheduled to be in the spring, Riggs must get out of its international business and be completely free of any further regulatory entanglements, PNC officials said. A spokesman for PNC declined to comment on whether Riggs's performance would have an impact on the deal in any way. PNC's offer involves a fixed amount of cash and stock.

The company is spending money as part of an effort to open 30 new branches and refurbish and expand the hours of several others. PNC has said it would continue with that effort after the sale.

Riggs will lose about a quarter of its deposits in exiting its embassy and international banking businesses.