Savannah Bancorp Inc. in Georgia said Thursday that its loan-loss provision in the fourth quarter was six times higher than anticipated due to a surge in nonperforming loans.
The $3.1 million loss provision, coupled with the reversal of about $330,000 of accrued interest for loans placed on nonaccrual status, would reduce earnings by roughly $1.8 million or 30 cents per share.
The $932 million-asset, three-bank holding company has not yet released its fourth-quarter results. It earned $2.3 million in the third quarter.
The total allowance for loan losses was $12.9 million at Dec. 31, or 1.59% of loans compared to 1.26% at Sept. 30.
The company had 49 nonperforming loans at yearend, totaling $17.4 million, a 691% leap from the year earlier. John C. Helmken 2nd, the president and chief executive of Savannah Bancorp, said the Bluffton, Ga., and Hilton Head Island, S.C., real estate markets "continued to slow during November and December and several of the larger loans moved from a current, or slightly past due, status to nonperforming status."
The company's shares were trading at $16.52 late Thursday, down 10.6% from Wednesday's closing price.
