Atlantic Coast Federal Corp. in Waycross, Ga., said it expects to report a fourth-quarter loss of up to $5.5 million.
In a preliminary earnings release Monday, the $893 million-asset company blamed the loss on its loan-loss provision, which could more than double after a commercial borrower declared bankruptcy in December.
Due to the impairment, along with a slowdown in the foreclosure process in Florida, the company said it expects to add about $3.8 million to its reserves. The provision could increase to $7 million from $3.1 million in the third quarter. Nonperforming assets are expected to rise 26%, to $38.1 million from $30.2 million a quarter earlier.
Jay Sidhu, Atlantic Coast's chief executive, said in the press release that the company, which is in the process of a second-step conversion that could raise $17 million, plans to apply for capital from the Small Business Lending Fund.
The combined efforts could boost the company's leverage ratio to 8.1%, Sidhu said.