Glendale Federal records its first profit since 1991.

SAN FRANCISCO -- Marking in a milestone in its recovery from near failure, Glendale Federal Bank reported third-quarter earnings of $9.4 million on Tuesday, its first quarterly operating profit since 1991.

The result for the Glendale, Cal.-based thrift, equal to 12 cents per share, reversed a $44 million loss in the comparable 1993 period. Glendale Federal's profit surprised analysts who had anticipated a loss of 12 cents per share for the September quarter, according to First Call.

Glendale Federal's return to the black was due mainly to sharp improvements in credit quality as Southern California's economy stabilized. Nonperforming loans and foreclosed property totaled $560 million, or 3.32% of total assets. at the end of September, down 38% from the year-ago period.

With its credit problems declining, the thrift provided $18.8 million for loan losses in the most recent quarter, down from $42.4 million in the compa-- rable 1993 period.

Glendale Federal's credit improvement reflected problem asset sales of $297 million since last June. The thrift has agreed to sell an additional $166 million in apartment and commercial real estate loans to an unidentified buyer in a transaction expected to be completed next month.

The thrift's net interest income was up 23.8% from the September 1993 period, but down 2% on a linked quarter basis.

Glendale Federal's loan originations were down a sharp 27.8% from a year ago. But the thrift has reversed its deposit outflow, with deposits up nearly 4% during the quarter.

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