Citing "questionable appraisals" and other factors, FNB Financial Services Corp., Greensboro, N.C., has announced that its banking subsidiary, FNB Southeast, recorded a $13.6 million special provision for credit losses in the fourth quarter."Through an internal investigation and reviews by independent consultants, the bank has identified a significant number of loans in its Harrisonburg, Va., region which are believed to have questionable appraisals and/or collateral value or which were incorrectly graded for credit risk based on the financial strength of the borrower and other factors," FNB Financial said. The company said the bank has also reclassified certain loans outside the Harrisonburg region because of the borrowers' deteriorating financial condition and the bank's discovery of "a significant reduction in the collateral base" of the loans. FNB Financial said it expects the provision for credit losses to reduce its annual earnings by approximately $8.5 million.

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