SAN FRANCISCO -- Glendale Federal Bank reported a $19.9 million third-quarter loss, slightly worse than the $16.8 million deficit posted in the same period last year.
The latest loss was expected and covers the period in which the Glendale, Calif.-based thrift successfully recapitalized. Glendale officials have said they do not expect the nation's fourth-largest thrift to return to profitability until sometime in 1994.
Glendale Federal's results for the period, the first quarter of its 1994 fiscal year, showed the effect on operating earnings of its extended fight for survival. "Core earnings power is feeble," said Montgomery Securities analyst Joseph A. Jolson.
High Cost of Funds
The $18 billion-asset thrift had a narrow interest rate spread of 2.02% during the quarter, compared with 2.54% a year ago. The thrift said it was forced to pay relatively high rates on deposits to counter publicity about
Chairman and chief executive Stephen J. Trafton has said that following recapitalization, his top priority is rebuilding Glendale Federal's earnings.
Earlier this week, the American Banker reported that Mr. Trafton was interested in acquiring Los Angeles-based California Federal Bank. Analysts who participated in a teleconference on Thursday said the chairman refused to comment on the story.
The thrift's nonperforming loans and foreclosed real estate dropped 3.5% during the quarter. Nonperforming assets dropped to $905 million, or 5.04% of total assets, at the end of September.
Glendale Federal's third-quarter provision dipped to $44.9 million, 2.6% below the previous quarter's level.