Glenfeld Inc. reported a loss of $26 million for its fiscal fourth quarter ended June 30, putting it further out of compliance with regulatory capital requirements.
In addition, the Glendale, Cal.-based thrift restated earnings for the first quarter of 1992 to show a loss of $146.7 million, wider than the $106.7 million loss originally reported.
The restatement, which followed a regulatory examination, was attributed to the reclassification of $1 billion in mortgage-backed securities as held for sale, requiring the securities to be booked at market value.
Ratio Barely Above Minimum
The ailing thrift reported risk-based capital equal to 6.85% of assets, below the June 30 minimum of 7.2%. And its core capital ratio is 3.06%, a hairbreadth over the required 3.0%.
In a previously announced agreement to amend its capital restoration plan, Glenfed committed itself to raise risk-based capital to 10% and core capital to 5% of assets by June 30,1993. But analysts say mounting losses make the task increasingly difficult.
"How they will go about securing capital to come into compliance is a real question," said E. Gareth Plank, a San Francisco-based analyst with Dean Witter Reynolds.
Glenfed's nonperforming assets and restructured loans totaled $827.1 million as of June 30, up 16.1% from the level a year ago but down 11.1% since the third quarter.
Quality Still a Problem
Despite the drop in nonperforming assets, loan quality is still deteriorating. A total of $142.2 million in new nonperforming assets in the June quarter was offset by $82.1 million in chargeoffs and writedowns plus $163.4 million in asset sales and paydowns.
"The company still faces significant uncertainties in the California economy and real estate markets," said Stephen J. Trafton, chairman and chief executive. Glenfed is trying to liquidate asset-based lending and real estate development subsidiaries.
Glenfed said it sold its entire $1.4 billion portfolio of mortgage-backed securities after the close of the quarter for a net gain of about $30 billion. At June 30, Glenfed's assets totalled $17.9 billion, down 16.6%.
As a result of its restatement for the third quarter, Glenfed lost $120.9 million in fiscal 1992, narrower than the $230.1 million loss in its 1991 fiscal year. The company lost $136.7 million in the 1991 fourth quarter.
The company recently won its case against federal regulators in the U.S. Claims Court over treatment of supervisory goodwill, a form of capital forebearance outlawed by the 1990 thrift bailout.
Glenfed said it wants to achieve a settlement that would substantially improve its capital position.