First Federal Bank Posts $5.6 Million Loss in 3Q

First Federal Bancshares of Arkansas Inc. lost $5.6 million in the third quarter ended Sept. 30, according to its quarterly report filed with the Security and Exchange Commission Tuesday.

First Federal (Nasdaq: FFBH) is the holding company of First Federal Bank, a Harrison savings thrift. The company had delayed filing its quarterly report with the SEC.

The loss is the first for the company so far this year and is better than in the third quarter last year.

Losses were $23.4 million on Sept. 30, 2009, and the bank ended the year with $46.2 million in total losses and a cease-and-desist order issued by the Office of Thrift Supervision.

Net losses for the year include dividends.

In a news release, CEO Larry J. Brandt said the institution put $5.6 million in loan loss reserves and had to write off $2.1 million in real estate.

"We have sold approximately $16 million of real estate owned during 2010 by reducing the price on our properties and aggressively marketing those properties," he said. "We have significantly reduced our assets by $100 million since the first of the year but both our deposits and liquidity continue to be strong to support our banking operations."

The thrift paid back $41 million it borrowed from the Federal Home Loan Bank in Dallas, he said. First Federal had nearly $95 million in nonperforming assets at the end of the third quarter.

The news release also said First Federal received a letter from the Nasdaq Stock Market on Nov. 23, putting it on notice that it was not in compliance with Rule 5250, which dictates that each company will file financial reports with the SEC in a timely manner. First Federal said it expects Tuesday's filing will satisfy the Nasdaq's rule.

Shares of First Federal were trading at $1.14 on Tuesday, down from the close on Monday.