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Shares of FirstFed Financial Corp. fell sharply Thursday after the Santa Monica, Calif., company announced that second-quarter profit had declined 10% from the year earlier.
The $7.7 billion-asset company reported net income of $29.1 million, or $1.74 per diluted share - 11 cents short of the average of analysts' estimates compiled by Thomson Financial.
The company attributed the earnings shortfall to a steep decline in originations and a significant rise in loan delinquencies.
FirstFed, which is primarily a mortgage lender, originated $180.4 million of loans in the quarter, down from nearly $600 million the year earlier. Through the first half it has originated $440 million of loans, roughly one-third its volume the year earlier.
Its ratio of nonperforming assets to total assets rose to 0.85%, from 0.21% six months earlier and 0.07% at June 30, 2006.
In extremely heavy trading, FirstFed's shares fell 6.3% Thursday, to $48.30. Its shares had not traded that low in nearly three years.
