Loan decline leads to loss at Tidelands Bank

Mount Pleasant-based Tidelands Bank opened its doors in fall 2003. (Staff/File)

Brad Nettles

The owner of Mount Pleasant-based Tidelands Bank reported a first-quarter net loss of $785,056, fueled by a decline in loans and, consequently, the interest income they provide.

On a per-share basis, the deficit was 19 cents. The figure includes a $180,000 quarterly dividend that Tidelands Bancshares Inc. owes the U.S. Treasury.

The results compared to a $1.14 million loss for the previous quarter and a nearly $24,000 profit for the first three months of 2012, Tidelands said in a filing with the Securities and Exchange Commission.

Thomas Lyles, chief executive officer and president, noted that the bank’s bottom line was squeezed by a drop in interest payments. Revenue in that category fell 25 percent to $4.3 million compared to March 2012. One reason. Lykes said, is that more borrowers have been paying off their loans early as the economy has improved.

“All that serves to say is that the interest income on that loan portfolio has declined,” he said.

Borrowings at Tidelands totaled $333 million as of March 31, down 10 percent from a year ago.

Lyles said the bank is now focused on replenishing that portfolio because Tidelands has worked out many of the recession-induced problem loans on its books.

“We need to grow it,” he said. “We don’t need to get it back to where it was two years ago. We need to do it gradually and methodically. It’s time.”

Tidelands said it set aside $185,000 in its reserve fund to cover potential losses for the January-March 2013 period. Its portfolio of repossessed real estate was valued at $22.5 million at the end of March, essentially flat compared to Dec. 31.

The seven-branch Tidelands has seven offices from the Hilton Head Island area to Myrtle Beach, though most of its business is concentrated in the Charleston region. Its annual meeting of shareholders is scheduled for May 20 at its Mount Pleasant offices.