Editor's note: This version of the story has been corrected to reflect the pretax charge, not a loss, recorded by StellarOne.

StellarOne said this week that real estate loans at Smith Mountain Lake are hampering the company's financial performance.

The bank -- one part FNB Corp. of Christiansburg and one part Virginia Financial Group since the two banks merged Feb. 28 -- did not mention any addresses or cite any projects by name.

But Charlottesville-based StellarOne revealed that, because of lake-area assets in trouble, the company was enlarging its loan loss reserve.

The larger reserve -- to be increased by $6 million during the third quarter -- "was necessitated by an increase in non-performing assets and additional valuation adjustments related primarily to certain acquisition and development projects in Smith Mountain Lake," a news release said.

The portfolio accounts for about $50 million, or 2.2 percent of the company's outstanding loan portfolio, as of Sept. 30.

Meanwhile, the company said it has auctioned some assets earmarked for sale as part of the merger of the two banks. As a result, the company said it expects to record a pretax charge of $1.7 million in the third quarter. In addition, StellarOne said it intends to record a pretax charge of $280,000 associated with a loss on a "small" amount of Fannie Mae preferred stock.

Third-quarter financials are due out Oct. 29.

O.R. Barham, StellarOne's president and chief executive officer, called the steps "planned actions that are consistent with our stated goal of diligently and promptly working through our problem assets."

Barham said acquisition and development loans, particularly at Smith Mountain Lake, are the "primary risk in our portfolio."