A contracting net interest margin and a higher provision for loan losses led to a down first quarter for Frontier Financial Corp. in Everett, Wash.
The $4.1 billion-asset company said Tuesday that its earnings fell 11.5% from a year earlier, to $15.5 million, and that earnings per share fell 13%, to 33 cents.
Frontier attributed a 58-basis-point decline in its net interest margin, to 5.01%, to interest rate cuts and variable-rate loans that repriced faster than deposits.
Earnings were also dampened by a sixfold increase in the loan-loss provision, to $9 million, as nonperforming loans, particularly in its residential construction portfolio, mounted. Its ratio of nonperforming assets to total assets climbed 44 basis points from a quarter earlier and 62 basis points from a year earlier, to 0.97% on March 31.
Net loans rose 22.9%, to $3.7 billion, largely because of the November acquisition of the $210 million-asset Bank of Salem in Oregon.
