Citing elevated credit costs, Washington Federal Inc. in Seattle said late Friday that profits fell 76% from a year earlier, to $8.4 million, in its fiscal second quarter, which ended March 31.
Its earnings per share of 10 cents fell short of market expectations. On average, analysts had forecast the $12.3 billion-asset company would earn 18 cents, according to Thomson Reuters.
The provision for loan losses shot up 468% from a year earlier, to $54 million.
In a press release, Roy M. Whitehead, Washington Federal's chairman, president and chief executive officer, attributed this increase to "a few large credits" in the residential construction portfolio.
He said that the provision would remain "at a high level" for the second quarter as well.
Nonperforming assets tripled from a year earlier, to $492 million, or 4.01% of total assets.
Washington Federal said that it began last month to market its foreclosed real estate more aggressively. It introduced special mortgage loans, starting at a rate of 3.99%, to attract buyers for the 250 properties that it owns, and so far sales are pending on 50 of the properties.