Service Bancorp Inc., the holding company for Strata Bank of Medway, announced a net loss of $2.5 million, due mostly to losses on construction loans.
The holding company also lost $2.6 million for the year. In 2007, the company saw profits of $260,000 for Q4 and $1.2 million for the year.
CEO Pamela J. Montpelier said in a statement that Strata had to write off $2.8 million in bad debt on a single residential construction loan for a project that was not completed. She said the bank decided not to acquire the project because of the additional expense and uncertainty involved, and instead sold it. Strata held a $3.87 million first mortgage on the University Park Lofts condominium project in Worcester, whose owner is now bankrupt.
Montpelier said Strata’s remaining construction loan portfolio is $17.6 million, or 5.3 percent of total loans. She said the bank is working to reduce the number of non-performing loans.
Strata has more than $415 million in assets. It operates eight branches in Bellingham, Franklin, Hopkinton, Medfield, Medway, Milford and Millis.
Strata Bank has faced pressure from an investor. Click here to read more.
