The quality of the bank holding company’s traditional mortgage business remains strong, but it said turmoil in the secondary market likely will lead to losses in overall home-equity operations.
The other problem involves a $4.7-million loan for which a borrower made “misrepresentations about collateral,” the bank said. The bank took a $4.2 million charge because it doesn’t believe the borrower will be able to repay the loan.
“While this is not a pleasant way to start the year, we believe both issues are essentially one-time events,” CEO Will Miller said in a statement. “In aggregate, the other aspects of the business are running close to our 2007 plans.”