FLORENCE, Ala. - First Southern Bancshares announced Monday that it would report a loss for the fourth quarter and the year, primarily because of a number of loan chargeoffs.

Charles Frederick Jr., president of the $171 million-asset company, said that the yearend loss will hurt the company's regulatory capital level but that he does not know by how much. The company has been in talks with regulators who have promised to act if the losses reduce First Southern's capital below the regulatory minimum, he said.

First Southern also announced that it would not pay a dividend for the fourth quarter, for the first time in its history, and that it plans to discontinue dividends for future quarters.

Mr. Frederick said the amount of the losses has not been determined. The fourth-quarter loss is First Southern's third consecutive quarterly deficit.

First Southern earned $274,000 in the fourth quarter of 1999 and $1.2 million for the year.

Deterioration in its commercial loan portfolio caused First Southern to increase its provisions for loan losses by an undetermined amount, Mr. Frederick said. A small portion of the chargeoffs are for fraudulent loans that were discovered in the second quarter and have cost the bank $925,000, he said.

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