Medway-based Service Bancorp, the holding company for Strata Bank, has reported a third quarter net loss of $8 million, its second straight third-quarter loss.

In the third quarter last year, the bank reported a net loss of $224,000. The increased loss of $7.8 million was primarily due “other-than-temporary impairment” charges on securities, the bank said. As a result, the bank has been reduced to “adequately capitalized” from “well capitalized.”

"The non-cash OTTI charges that were disclosed in September were the principal reason that the bank's regulatory capital ratios were reduced from 'well capitalized' to 'adequately capitalized' levels as of Sept. 30,” said Edward A. Hjerpe, III, interim president and chief executive officer of Service Bancorp and Strata Bank. “As we continue to develop our plans to strengthen capital, we are pleased to report that the bank meets the regulatory definition of adequately capitalized, and is experiencing improving trends in asset quality as well as a widening net interest margin."

On Sept. 30,  the company recorded OTTI charges of $6.6 million related to its investments in preferred securities issued by Fannie Mae and Freddie Mac, and $1.9 million related to its investments in corporate bonds issued by Lehman Bros. Holdings.