Severn Bancorp (SVBI) in Annapolis, Md., will take a $4 million pretax charge in the fourth quarter after selling troubled loans.
The $820 million-asset company said Friday that it sold loans with a face value of $15 million for $11 million. The bulk of the nonperforming loans were residential, the company said in a press release.
Severn also wrote down and sold a number of foreclosed properties. The company expects the balance of foreclosed properties to fall below $10 million in the fourth quarter.
"Both sales represent material reductions in our non-performing loans, significantly reducing the resources that have been necessary to manage non-performing loans," Alan Hyatt, Severn's president and chief executive, said in the release. "Furthermore, the sales enhance our efforts to focus on improving earnings and increasing profitability."
Severn, which has four branches in Mayland, lost $20.5 million in the third quarter after selling $33.2 million of troubled loans for $23 million.