Bank of Granite Corp.'s streak of consecutive quarterly dividends has ended at 219.
The Granite Falls, N.C., company, hobbled by losses on loans to real estate developers, said Tuesday that it is suspending its dividend payment to shareholders, because it needs to preserve its capital.
The $1.2 billion-asset Bank of Granite lost $3.2 million in the second quarter as its nonperforming loans spiked to 4.25% of total loans.
The decision to suspend dividend payouts is part of a plan by the company to strengthen its balance sheet and capital ratios.
"We're not particularly proud of ending the streak," Scott Anderson, Bank of Granite's president and chief executive, said Tuesday. "But we know we've done the right thing for the bank and the shareholders. We're just going to start a new streak. But we can't say if we're going to do it next quarter."
The dividend suspension is expected to save Bank of Granite $8 million annually.
Its board also approved a 5-for-4 split of the stock and the merger of its mortgage subsidiary into its bank unit. Combining Bank of Granite with Granite Mortgage Inc., is expected to reduce expenses by about $1.5 million next year, in part through layoffs.
Bank of Granite's shares have lost nearly half of their value in the past year. They closed Tuesday at $7.25.
