Thursday, Cascade Financial Corp. (CASB), the parent company of Cascade Bank, said it expects a loss for the second quarter, as it would take a provision for loan losses and assume a goodwill impairment charge, amid the housing industry woes. Consequently, the company has decided to briefly suspend the regular quarterly cash dividend.
For the second quarter, given the anticipated loan loss provision expense, the company currently expects to post a total loss in the range of $19 million to $21 million, including charges, and an after tax loss from operations in the range of $8 million to $10 million. The company expects to take a loan loss provision of about $15 million and a non-cash goodwill impairment charge of $12 million for the quarter.
The Everett, Washington-based company indicated that the goodwill impairment represents the write-off of a portion of the goodwill recorded from a prior acquisition, and does not impact liquidity, operations, tangible capital or the regulatory capital ratios.
Carol Nelson, President and CEO, Cascade Financial said, "Like many other northwest banks, the adverse economy, which has affected the housing industry has caused us to add to our reserve for loan losses. The continued decline in the residential real estate market has resulted in an increase in nonperforming loans and charge-offs, primarily in the residential land development and construction portfolios."
The company also said it has determined that it was pertinent to temporarily suspend the regular quarterly cash dividend and said it expects to return to paying a quarterly cash dividend as soon as market conditions improve. Earlier on April 29, 2009, the company had paid a quarterly cash dividend of $0.01 per common share.
Cascade is slated to report its second quarter 2009 results after the market closes on Monday, July 27, 2009.
CASB is currently trading at $2.51, down $0.10 or 3.83% on the Nasdaq.
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