Delta Reports $40M Loss

Delta Financial Corp., Woodbury, N.Y., has reported a net loss of $39.6 million ($1.70 per share) for the third quarter, compared with net income of $8.0 million ($0.33 per share) for the same period in 2006.Hugh Miller, president and chief executive, attributed the loss to "unprecedented events" that affected not only Delta's results but also most of the other companies in the lending sector. "But more recently, the secondary markets, which began to improve since September, took a turn for the worse, initially driven by the rating agencies' sudden downgrade of tens of billions of dollars worth of mortgage-backed and related securities," Mr. Miller said. "This and other developments have severely limited the ability of companies in our sector to complete securitizations as a source of financing at this time." As a result, Delta is negotiating with potential debt or equity investors. Just this past August, the company raised $70 million in working capital. Delta also announced that it has laid off approximately 470 employees and will take a restructuring charge of $7.5 million, of which $1.4 million was paid in severance. The company can be found on the Web at http://www.deltafinancial.com.