American Business Financial Services, Philadelphia, has reported a loss of $24.8 million ($8.35 per share) for the fiscal second quarter ended Dec. 31, 2003, down from net income of $2.1 million ($0.69 per share) a year earlier.Albert W. Mandia, executive vice president and chief financial officer of ABFS, attributed the quarterly loss to several factors, "including financial and human resource issues," which he said reduced the company's ability to originate loans and generate revenue. "The company also experienced $12.0 million of pretax noncash valuation adjustments on our securitization assets charged to the income statement," he said. "Additionally, operating expense levels that would support greater loan origination volume also contributed to the quarterly loss." The noncash adjustment mentioned by Mr. Mandia also included $2.7 million charged to other comprehensive income, a component of stockholders' equity. The securitization assets are interest-only strips and servicing rights, and the writedown in value is because of higher-than-anticipated prepayments on securitized loans. Mr. Mandia added that ABFS would likely incur operating losses through its fiscal fourth quarter.
