FirstFed Financial Corp.reported Friday it will have an operating loss in the first quarter after it was hit hard mortgage defaults, prompting it to raise its loan loss provisions.

The Santa Monica-based holding company for First Federal Bank of California said that it will post a loss of $65 million to $75 million ($4.75 to $5.50 per share), as it puts aside between $140 million and $160 million in cash to brace for “substantially” higher losses.

“The bank’s decision to substantially increase its estimate of losses on single family loans is based on both the continuing decline in California real-estate prices during the first quarter of 2008,” FirstFed said in a statement.

Shares in FirstFed shot up nearly 11 percent in early trading Friday to $16.22.