First Mariner Reports Alt-A-Related Loss

Citing continuing problems with alternative-A mortgage loans originated through the wholesale channel in 2006, First Mariner Bancorp, Baltimore, has reported a net loss of $3.87 million ($0.59 per share) for the second quarter.This compares with net income of $2.2 million ($0.33 per share) for the same period last year. "We have been aggressive in identifying the potential loss in our wholesale-originated mortgage products, specifically alt-A financing, which have been repurchased under recourse provisions," said Edwin F. Hale Sr., First Mariner's chairman and chief executive. "Further value declines in residential real estate, particularly in the Northern Virginia region, resulted in the recognition of additional loan-loss provisions, valuation reserves, and writedowns on foreclosed real estate totaling $5.0 million for the quarter. It is important to recognize that this additional loss provision is not the result of increases in the volume of loans repurchased or subject to repurchases, but rather what we believe to be an additional decline in the value of the properties for which we already made loan-loss provisions in previous quarters." The company said it has closed its wholesale mortgage lending unit. Credit performance of its retail originations has remained strong, it added.