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StellarOne reports loss: $7.7 million
StellarOne Corp. reports third-quarter loss
Date published: 10/29/2009
BY BILL FREEHLING StellarOne Corp. lost $7.7 million during the third quarter due in part to losses on loans made for Smith Mountain Lake real estate. The parent company of StellarOne Bank released its earnings yesterday and held a conference call for analysts. Reporters weren't allowed on the conference call but could listen on a webcast. The bank's $7.7 million net loss compared to a $2 million net gain during the third quarter of 2008. The company lost $785,000 during the second quarter. StellarOne's third-quarter earnings were impacted by $20.1 million in loan loss provisions, about triple the amount from the second quarter. Many of the problems are due to residential development and construction loans in Smith Mountain Lake in Southwest Virginia. That is a popular place for second homes for residents of Roanoke and Lynchburg, but of late prices have fallen on weak demand. StellarOne has been doing some bulk sales and auctions for its SML loan portfolio. StellarOne President and CEO O.R. Barham Jr. said yesterday that the company is aggressively recognizing losses to make sure it is protected should the economy weaken. He noted that the bank easily has the capital to absorb the losses. Barham said credit problems have slowed of late at Smith Mountain Lake, and he is approaching the next two quarters with "subdued optimism" about improving conditions. Rising unemployment is his biggest concern, but he noted that joblessness is relatively low in most of the bank's areas. StellarOne has been consolidating branches since last year to further improve its capital position. Barham said for now the bank has no plans to repay the $30 million TARP loan from the U.S. Treasury Department. StellarOne is based in Charlottesville. It has six branches in the Fredericksburg area; as of June 30 it had the sixth-most customer deposits in the market. Bill Freehling: 540/374-5405
Date published: 10/29/2009
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