Nonperforming assets shot up dramatically at Frontier Financial Corp. in Everett, Wash., resulting in a first-quarter loss of $33.8 million, or 72 cents per share.
The $4.2 billion-asset company said late Thursday that nonperformers made up 16.25% of its total assets at the end of the quarter, rising from an already elevated 10.87% in the fourth quarter and 0.97% a year earlier.
The provision for loan losses grew 31% from the fourth quarter and fivefold from a year earlier, to $58 million.
The average estimate of analysts surveyed by Thomson Reuters was for Frontier to report a 43-cent loss per share. It had earned $15.5 million, or 33 cents a share, in the first quarter of 2008 but has struggled lately with trouble in its construction and development loans.
The company — which is under a regulatory order to boost capital — said it would suspend the matching of employee 401(k) plan contributions as of May 1. This would save $1.7 million a year, it said.
Frontier said it continues to look for capital and has hired an investment banking firm to help. Last month the Federal Deposit Insurance Corp. and the Washington State Department of Financial Institutions told its bank unit to maintain a leverage ratio of at least 10%, double the usual minimum. The company did not specify what the leverage ratio is now, but it was reported as 8.53% at yearend.
Early Friday afternoon Frontier's stock had slipped 11 cents, to $1.49.