NetBank loss hits $31 million
Atlanta Business Chronicle - August 8, 2006
The Atlanta-based banking company (NASDAQ: NTBK) posted a loss of $31.4 million and a loss per share of 68 cents, compared with net income of $2.3 million and earnings of 5 cents a share in the second quarter of 2005.
Mortgage originations and sales softened during the quarter based on origination trends and the company's decision during the quarter to cut capacity and emphasize a more limited set of products in its non-conforming operation. Conforming and non-conforming production totaled $2.6 billion, a decrease of $233 million. Following the decline in production, sales eased by $400 million to $2.5 billion.
"Quarterly results remain unacceptable,'' said Douglas K. Freeman, chairman and CEO. "The company's performance continues to be adversely impacted by the flat yield curve and relentless pricing and operating pressures we and other institutions are experiencing on the mortgage side of our businesses. In light of these conditions, our number one priority is to protect shareholder equity to the extent possible without sacrificing the components of our franchise that have the greatest long-term value."
Freeman also noted the company has reduced staff in underperforming areas and is trying to sell its mortgage servicing platform and portfolio of mortgage servicing rights.
Through six months, the company had a net loss of $42.4 million and a loss of 92 cents a share, compared with net income of $296,000 and earnings of 1 cent a share during the first half of 2005.