Peoples Bancorp in Marietta, Ohio, plans to increase reserves by $6.6 million to cover four commercial loans that it's moved to impaired status.
The $3.2 billion-asset company said the total reserved for the loans will be $13.6 million, after it previously increased reserves by $7 million for the loans. The new reserve will be booked in the fourth quarter.
The loans belong to a single commercial loan relationship, with an unnamed borrower in the coal industry, and had an aggregate principal balance of $16.1 million, as of Nov. 24. After the fourth-quarter reserve is booked, the aggregate total net recorded investment in the loans will be zero.
The loans' collateral includes business assets and real estate. Peoples decided to increase reserves in the fourth quarter after it received information that the collateral has a lower value than it previously calculated.
Peoples does not expect its “out-of-pocket expenditures” related to the impaired loans to be material to earnings.