FirstFed Financial Corp. in Los Angeles said Wednesday that it lost $35.5 million in the second quarter after it recorded a $90.2 million provision for losses on option adjustable-rate mortgages. It reported a profit of $29.1 million for last year's second quarter.
The latest results were an improvement over the first quarter, when FirstFed lost $69.8 million.
The $7.2 billion-asset company said nonaccrual loans in its single-family loan portfolio rose 30% from March 31, to $491.7 million, as large numbers of adjustable-rate mortgages reset in the latter part of 2007 and early 2008. Nonperforming assets overall increased 34% from March 31, to $588.3 million, or 8.2% of total assets.
The company said its First Federal Bank of California remained well capitalized, with a tangible capital ratio of 9.45% and a total risk-based capital ratio of 17.83%.
FirstFed's per-share loss of $2.60 was in line with the average estimate of analysts polled by Thomson Reuters.