The parent company of First Federal Bank of California, citing rising single-family loan delinquencies, reported Wednesday that the provision for loan losses for the current quarter is expected to be between $20 million and $23 million, compared with $4.5 million in the third quarter of 2007.
FirstFed Financial Corp. reported that non-accrual single-family loans as of Dec. 31 rose to about $180 million, from $83 million as of Sept. 30, while single-family loans 30 to 89 days delinquent rose to about $237 million, from $72 million.
Adjustable rate mortgages that have reached their maximum allowable negative amortization, which now require an increased payment, are a contributing factor in the higher level of delinquent loans, according to FirstFed.
In addition to the higher level of loan loss expense, the company will record about $2 million in additional expense during the quarter related to the move of its corporate headquarters.
The higher estimates for loan loss and occupancy related expenses are preliminary and unaudited. The company expects to issue its year-end earnings on Jan. 25.
Originally published in the Santa Monica Daily Press print edition on January 17, 2008. Read the original PDF.