Its investments in bank stocks prompted StellarOne Corp. in Charlottesville, Va., to widen its third-quarter loss by 16%, to $9.4 million, or 41 cents a share.
The $3 billion-asset StellarOne said late Monday that the revised results include a $1.9 million impairment charge on the common stock of several Virginia and North Carolina community banks held in its investment portfolio. This puts the value of the stock at $1.1 million.
O. R. Barham Jr., StellarOne's president and chief executive officer, said in a press release that an extended period of low share prices and the length of the anticipated recovery period forced the writedown.
But, he said, "we continue to view these bank stocks as well-managed companies with solid geographic franchises that will recover in an improving economy."
In the preliminary results it announced Oct. 28, StellarOne had reported a loss of $8.1 million, largely because of a $20.1 million provision for loan losses.
The company, which has been having trouble with residential development and construction loans lately, had a loss of $785,000 in the second quarter, when the provision was $6.5 million, and a profit of $2 million in the third quarter of 2008, when the provision was $6 million.
StellarOne's net chargeoffs roughly doubled from the second quarter and increased 456% from the year-earlier period, to $13.9 million.
Its ratio of nonperforming assets to total assets was 2.27% at Sept. 30, down from 2.6% for the second quarter and up from 1.62% a year earlier.