PFF Bancorp has certainly fallen on hard times, selling itself off at a fire sale price of $1.35 a share a few short years after trading at almost $40 a share. Correction: maybe selling itself off....
Now, PFF is making headlines in Europe as an example of the excesses of the housing bubble here. The Financial Times had an article about the pounding small banks have taken, and they led off with PFF:
When PFF Bancorp, Southern California's oldest bank, was sold for the fire-sale price of $30.5m this month, it was buckling under the weight of soured loans to real estate developers and its stock had plunged more than 95 per cent from its 2006 peak.
Like many small regional and community banks, PFF increased its loan portfolio over the past decade - doubling it to more than $4bn - in large part by financing commercial and residential developers and homebuilders during the house price boom. Now, as these companies struggle through the housing slump, lenders such as PFF are feeling the pinch.
Banks' first-quarter losses on such real estate loans were more than 15 times the amount of the same quarter last year, according to the Federal Deposit Insurance Corporation.
PFF Bancorp, which trades as PFB on the New York Stock Exchange, closed yesterday at $1.08 a share.
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