Despite declining nonperforming assets, Severn Bancorp Inc. in Annapolis, Md., boosted its loan-loss reserves by $3 million in the second quarter.
The move drove the $940 million-asset company into the red; on Friday it reported a quarterly loss of $846,000, compared to earnings of $593,000 a year earlier.
The company said in a press release it is hedging against potential losses in its acquisition and development portfolio, which it continues to monitor.
The $3 million provision for loan losses is a threefold increase from a year earlier. The provision was $634,000 in the first quarter.
Nonperforming assets totaled $59.3 million at the end of the quarter, or 5.7% of total assets. The total amount is down 8% from a year earlier and down 18% from the third quarter 2010 when nonperforming assets peaked at $72 million.
