Shares of PFF Bancorp Inc. plunged to a six-year low Tuesday on news that the Rancho Cucamonga, Calif., lost $7.5 million in its fiscal second quarter, which ended Sept. 30, as a result of continued deterioration in credit quality.
The $4.5 billion-asset parent of PFF Bank and Trust reported the loss after the markets closed Monday; it earned $14 million in the same quarter last year.
PFF attributed the loss to a $34 million loan-loss provision it recorded as a result of an increase in nonperforming loans, particularly residential construction ones, as home sales slowed and prices declined in the Inland Empire region east of Los Angeles. In the same quarter last year, PFF recorded a loan-loss provision of $2.5 million.
Nonaccrual loans more than doubled from the previous quarter, to $227.7 million, or 5.52% of net loans and leases.
In heavy trading, PFF's shares were down nearly 18% Tuesday, to close $11.48. The shares are down 66% for the year.
