Mount Pleasant-based Tidelands Bank narrows its quarterly loss

The owner of Tidelands Bank has narrowed its net loss for the second quarter partly by lowering overhead and having to set aside less money to cover soured loans.

Mount Pleasant-based Tidelands Bancshares Inc. said in a filing with regulators that it lost $390,000 for the three-month period ending June 30 after accounting for an $180,600 dividend payment it owes the U.S. Treasury.

That compared to a nearly $6.4 million loss for the 2011 second quarter.

A key difference was the amount of money Tidelands had to reserve to cover potential loan losses: $310,000 in the most recent quarter compared to more than $5.5 million a year ago.

Also, the bank owner has cut expenses for the April-June period by $960,000, or 21 percent to $3.68 million from a year earlier.

Tidelands’ loss for the first six months of the year was $366,290 after factoring in the Treasury dividends compared to a $10.8 million loss in the first half of 2011.

Thomas Lyles, chief executive officer, could not be reached for comment Monday.

The bank, which operates seven branches along the South Carolina coast, was hit hard by the real estate downturn. It has been working to reduce its portfolio of bad loans and increase its capital levels under an agreement with federal banking regulators.

Tidelands said it had 99 “nonperforming” loans totaling $51.4 million as of June 30,

The company raised about $14.5 million in December 2008 by selling preferred stock to Treasury under the federal agency’s Troubled Asset Relief Program, or TARP. Those shares yield 5 percent annually for the first five years and 9 percent after that. The company opted to postpone its TARP payments in late 2010 to conserve cash.

The unpaid dividends have been accruing at a quarterly rate of about $181,000 for a total of about $1.3 million as of June 30.

Eventually, the money is to be repaid.