With nonperforming assets climbing to 7.23% of its total, BancTrust Financial Group Inc. of Mobile said Monday that it swung to a first-quarter loss of $6 million, from a profit of $2.7 million a year earlier.

The results included a $745,000 expense to pay dividends on government capital.

The $2.2 billion-asset BancTrust hiked its provision for loan losses 279% from a year earlier, to $11.1 million, as its nonperformers rose 87%, to $158 million. The ratio of net chargeoffs to average loans climbed 32 basis points, to 1.03%.

BancTrust said the high level of nonperformers contributed to a 70-basis-point decline in its net interest margin, to 2.83%.

"Our Florida and Alabama coastal markets continue to be the primary source of our problem loans, because of the fallout from lower real estate prices and lower real estate sales," W. Bibb Lamar Jr., BancTrust's president and chief executive officer, said in a press release. "The recent increases in layoffs in the timber and paper industries are also beginning to affect some of our smaller markets where these industries are a major factor in their economy."

BancTrust said it cut its second-quarter dividend to a penny per share to help preserve capital. It said the cut would save $2.1 million. The dividend had been 2.5 cents in the first quarter and 13 cents in each of the four quarters before that.

BancTrust, which received $50 million from the Treasury Department's Troubled Asset Relief Program, said it remains well capitalized.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.