A higher loan-loss provision and a drop in interest income drove VSB Bancorp Inc.'s fourth-quarter earnings down 66%, to $162,668, from a year earlier. 

The $242 million-asset company also reported Wednesday that full-year for 2011 fell 23% from 2010, to $1.4 million.

For the fourth quarter the provision for loan losses totaled $450,000, 30 times higher than a year earlier. This was due to increased chargeoffs related to the declining collateral values on some nonperforming loans. The loan-loss provision for the year totaled $595,000, more than four times higher than 2010.

The Staten Island, N.Y.,company said that fourth-quarter interest income dropped almost 13% from a year earlier, to roughly $2 million. This was mostly caused by a decline in the company's average yield on investment securities due to low interest rates and an increase in loan defaults. Interest income for the year dropped almost 6% from 2010, to $8.7 million. 

VSB's shares were trading at $9.84 on Thursday morning, down more than 5% from Wednesday’s close.

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