Dearborn Bancorp Inc. in Michigan has increased its loan-loss provision by 435% for the fourth quarter, leading to a loss of $5.8 million for the quarter rather than earnings of $4.2 million as previously reported.
The $1 billion-asset company said it set aside the extra $10 million for its provision after it received updated financial statements and collateral evaluations on several of its problem loans.
Dearborn had previously announced it set aside $2.3 million in provisions.
It did not provide details about how the additional provisioning would affect the already-thin capital ratios of its Fidelity Bank unit.
Dearborn reported in January that the unit was adequately capitalized as of Dec. 31, reporting a total risk-based capital ratio then of 8.37%.
Last month it entered into a consent order with the Federal Deposit Insurance Corp. and the Michigan Office of Financial and Insurance Regulation, but specific details of the order have not yet been made public.
As announced in January, Dearborn at the end of the fourth quarter had nonperforming assets of $127.6 million, making up 12.8% of total assets, and representing a 60% increase from a year earlier.