Life Insurers Seek Money in the Banks

Newton County Loan & Savings (set to be acquired by Lincoln National) remained strongly capitalized, with a leverage ratio of 15.09% and a risk-based capital ratio of 21.46% as of Sept. 30. However, its nonperforming assets, including loans past due 90 days or more and repossessed real estate, comprised 20.22% of total assets.

The nonperforming assets are mainly repossessed one- to four-family homes, which hopefully doesn't present a major threat to capital. The scary thing for Newton County is that loans delinquent 30 to 89 days represented another 17.56% of total assets. Any acquisition deal is a good one for this institution.

Genworth Financial posted a net loss of $258 million for the third quarter, on net investment losses of $816 million. The company has agreed to purchase InterBank FSB, of Maple Grove, Minn., a thrift with $858 million in total assets as of Sept. 30.

Like so many thrifts, InterBank has suffered mortgage quality problems over the past year, and the institution posted five straight quarterly losses through September. Nonperforming assets comprised 5.84% of total assets. Loans delinquent 30 to 89 days comprised another 1.96% of total assets. The thrift's net charge-offs for the third quarter totaled $11.7 million.

Loan loss reserves as of Sept. 30 totaled $9.4 million. The bank was still considered well-capitalized per regulatory guidelines as of Sept. 30, with a risk-based capital ratio of 10.11%, but another quarter of declining loan quality or similar charge-off activity could cause the institution to slip below the 10% required for a well capitalized institution.