Boston Private Financial Holdings Inc.'s stock plunged Thursday, after the company warned that its fourth-quarter loss would be higher than the previously announced $20.4 million, due to a significant increase in its loan-loss provision.
The $6.8 billion-asset Boston Private said after the market closed Wednesday it would add $16 million to $19 million to its provision for the quarter, because of weakness in the residential construction and land loan portfolio at its Los Angeles unit, First Private Bank and Trust.
The additional provision would increase the fourth-quarter loss by $10 million to $12 million after taxes, Boston Private said.
David Kaye, its chief financial officer, said in a press release that the company would "downstream" $11 million to $12 million of its current capital to First Private. He also said Boston Private will ask the Securities and Exchange Commission to extend the deadline for filing its annual report.
By late Thursday, Boston Private's shares had dropped 28% from Wednesday's close, to $14.46.
Boston Private had earned $15.6 million in the fourth quarter of 2006, and impairment charges on goodwill and other intangible assets figured heavily into its fourth-quarter loss for 2007.
