BSD Bancorp’s three wholly owned subsidiaries all...

BSD Bancorp’s three wholly owned subsidiaries all reported increased net income during the second quarter ended June 30, but the San Diego-based bank holding company reported that net income fell, to $241,000, from restated earnings of $658,000 in the second quarter of 1987.

BSD linked the drop to problem loans at its 51%-owned Bank of La Costa subsidiary and the expiration of tax-loss carry forwards. The 51%-owned Bank of La Costa Subsidiary reported a $450,000 net loss during the quarter, contrasted with restated earnings of $59,000 a year ago.

The net loss was caused by loan write-offs, but its 7.5% primary capital-to-assets ratio remains comfortably above the regulatory minimum, according to BSD Chief Operating Officer Vito Guarino.

“Several of the (problem loans) had been around for a period of time,” Guarino said Thursday. “We decided to take some relatively significant hits now and hopefully get back into the black for the rest of the year.”

BSD’s three wholly owned subsidiaries, which account for 87% of BSD’s assets, all reported operating profits for the second quarter ended June 30. BSD reported $337 million in total assets on June 30, compared to $355 million in assets a year ago.

Bank of San Diego reported a $186,000 operating profit, compared to restated operating income of $136,000 a year ago.

American Valley Bank reported $189,000 in quarterly earnings, against restated earnings of $66,000 during the second quarter of the previous year. Coast Bank reported $218,000 in net income, compared to $190,000 during the previous second quarter.

BSD reported $723,000 in net income for the first half of 1988, compared to restated earnings of $891,000 during the like period a year ago. Deposits on June 30 were $303 million, down from $327 million a year ago. Total loans fell to $240 million from $263 million a year ago. BSD’s primary capital-to-assets ratio rose to 7.7%, up from 6.6% a year ago.