Posted 11/16/2009 09:29 am
Updated 1 year ago
First Federal Bancshares of Arkansas Inc., based in Harrison, posted a $23.2 million loss for the third quarter, which ended Sept. 30 for the company. FFB is the holding company for thrift First Federal Bank. The company had net income of $218,000 for the same quarter a year ago.
The bank had a net loss of $937,000 for the second quarter. It has recorded net losses of $25.7 million through the first three quarters of the year, according to a release about its earnings.
First Federal said its decrease in net income was due to an increase in loan loss reserves, insurance premiums from the Federal Deposit Insurance Corp. and increases in other real estate owned or property the bank has had to take back on bad loans. The company attributed its loss in the second quarter to the same challenges.
The company's net loss to common shareholders was $4.84 per common share for the third quarter of 2009 compared with net income of 5 cents per common share for the third quarter of 2008.
For the first nine months of the year, that translates to a net loss of $5.40 per share.
Stockholders' equity per common share was $9.73 and the bank "continued to be categorized as well-capitalized," it said in the release.
"Our results are disappointing and continue to be reflective of the difficult and turbulent operating environment for banks in general and the economy as a whole," said Larry J. Brandt, CEO.
"The vast majority of our problem loans are secured by property in Benton and Washington counties in northwest Arkansas. We continue to remain optimistic about the recovery for our market area due to the fundamentally positive attributes for the area's economy and its location for the corporate headquarters for Wal-Mart, Tyson Foods, FedEx Freight and J.B. Hunt," he said.
Brandt said the company has taken steps "to aggressively address the resolution of our problem loans."
During the third quarter, the company added $30.2 million to its loan loss allowance, "including a $14.4 million of specific valuation allowances on nonperforming loans, $9.6 million of which was specifically related to land and land development loans."
"While these actions adversely impacted our results of operations, we believe we are better positioned to deal with our problem assets and return to profitability as conditions improve," Brandt said.
Total assets as of Sept. 30, were $738.6 million, total liabilities were $675.3 million and stockholders' equity totaled $63.3 million or 8.6 percent of total assets. The return on assets was a negative 11.9 percent and return on equity was a negative 106.7 percent.
Shares of First Federal (Nasdaq: FFBH) were trading at $2.94 on Monday after closing at $3.13 on Friday.