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BV Financial adds $111,075 allowance for loan losses

Banking group BV Financial has added $111,075 to its allowance for loan losses related to a $1 million construction loan in which the repayment by the borrower was conditioned on the sale of the completed properties.

While the borrower is current on his payments, the inability of the borrower to successfully sell the properties in the foreseeable future has caused the loan to be downgraded and the additional reserve to be recognized.

Edmund Leonard, chairman and CFO, said: The downturn in the economy has affected our local markets, resulting in a slowdown in residential real estate sales, which has negatively impacted developers.