BSD Bancorp Turns Around Losses With $573,000 Earnings

BSD Bancorp earned $573,000 for the nine months ended Sept. 30, a turnaround from a nearly $1.2-million loss in the comparable period last year, according to the company’s 10-Q report to the Securities & Exchange Commission.

The San Diego-based bank holding company’s total assets dropped 7.7%, to $317.1 million, and its net worth-to-assets ratio rose to 5.1%, from 4.6% a year ago.

However, BSD remains below the 7% regulatory guideline for a bank’s net worth. In addition, the company’s filing said that it doesn’t expect its largest subsidiary, Bank of San Diego, to comply with an agreement with federal regulators to attain a 7% net worth ratio by the end of 1985.

The company also disclosed that repayment of $1.4 million in promissory notes originally due Oct. 1 has been extended to Jan. 1, 1986. BSD will repay the notes either by obtaining a renewal extension or refinancing “through an outside institution by pledging certain assets.”

BSD’s filing also revealed that it is negotiating with “outside interests” to raise capital by issuing as much as $2 million in preferred stock. Negotiations have a “high potential” for success within the next six months, the company said.

The company’s planned sale of its Bank of La Costa subsidiary to a group of investors led by the bank’s chairman would have boosted capital by $1.3 million, but the sale was terminated Monday.

In addition to the preferred stock negotiations, BSD is exploring other possible capital infusions, including an underwritten public stock offering or a private stock placement to institutional investors, the company’s filing disclosed.