Mobile-based BancTrust Financial Group Inc., which does business as BankTrust, blamed bad loans on the Alabama coast and the Florida Panhandle for its $3.6 million fourth quarter loss.

BancTrust said Monday it lost $3.6 million, or 21 cents per share, in the fourth quarter of 2008, compared with income of $120,000, or 1 cent per share, in the fourth quarter of 2007.

The bank reported earnings of $1.1 million, or 6 cents per share, in 2008, compared with $6.2 million, or 49 cents per share, in 2007. BancTrust’s 2007 acquisition of The Peoples BancTrust Co. helped its 2008 earnings.

Bank president and CEO W. Bibb Lamar Jr. said the bank’s core south Alabama market continued to grow, but the company’s loan portfolio has suffered, especially along the Gulf Coast where real estate prices have declined.