FirstFed Financial Corp. on Monday reported a larger-than-expected loss for the second straight quarter, hurt by declining home prices and a more than 10-fold increase in its provision for bad loans.
The Los Angeles-based parent of First Federal Bank of California reported a preliminary fourth quarter net loss of nearly $245 million (-$17.91 a share), compared with net income of $8.4 million (61 cents) a year ago. Its loan loss provision increased $199 million to $220 million. Net interest income fell 31 percent to $39.6 million. The value of non-performing assets rose 159 percent to more than $521 million.
Analysts surveyed by Reuters Estimates had expected the savings and loan to report a loss of $3.12 a share, excluding one-time items.
FirstFed last week was issued a cease-and-desist order by the Office of Thrift Supervision, requiring it to submit a detailed plan within 15 days to address how it will remain well capitalized.
"While non performing assets have stabilized, they are not decreasing as fast as we had hoped," Chief Executive Babette Heimbuch said in a statement. "We are focused on modifying our adjustable rate loans where possible so that borrower payments are affordable and stable."
For the full year, FirstFed reported a net loss of nearly $402 million (-$29.39), compared with net income of $92.9 million ($6.00) in 2007.
FirstFed shares were down 7 cents, or 8 percent, to 78 cents in morning trading in the New York Stock Exchange.
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