Battered by large losses on subprime mortgage and construction loans, First Banks Inc. in St. Louis expects to report a loss of nearly $40 million when it announces second-quarter earnings next week.
The privately held $10.5 billion-asset company also said in a Securities and Exchange Commission filing last week that it lost $4.9 million in the first quarter. It had delayed reporting the results after uncovering accounting errors.
First Banks will release detailed second-quarter earnings Aug. 13. In preliminary results released last week, it said its loan-loss provision grew 83% from the first quarter, to $84.1 million.
Of the $250 million of nonperforming assets it reported for the first quarter, subprime mortgages accounted for $11 million. Real estate loans and development loans in Northern California and Florida accounted for nearly $160 million.
First Banks also announced last week that the Dierberg family, its primary owner, had put up $100 million to establish a workout subsidiary for its troubled loans. The total is roughly $60 million more than the family had originally pledged when First Banks announced plans in May to create the workout subsidiary.
