Glendale Federal Bank reported its third consecutive profitable quarter, booking earnings of $40.9 million in the period ended March 31.

Glendale also posted $63 million in net income for the latest nine months.

The results were a marked turnaround from a year earlier, when Glenfed, one of the nation's largest thrifts, reported losses of $144 million for the period - its fiscal third quarter, and $204 million for the comparable nine months.

Like other thrifts in the late '80s and early '90s, Glenfed was stung by bad realty loans and rising capital requirements. To keep from being seized by regulators, Glenfed went through a recapitalization in 1993 which eliminated its holding company and raised $451 million of new capital from investors.

Late last year Glenfed sold its Florida and Washington state thrift units. The Florida sale resulted in a $136 million charge against earnings.

Now Glenfed operates exclusively in California, and analysts and Glenfed officials said the thrift is humming.

"I think our report demonstrates very clearly that 18 months past the largest private recapitalization of a troubled thrift institution, our business plan is so far meeting with success," said Glenfed chairman and chief executive Stephen J. Trafton.

"It was a very good, very impressive quarter," added Gary Gordon, a stock analyst with PaineWebber Inc..

Mr. Trafton said that core California deposits rose 22.4% in the quarter to $7.7 billion. He attributed the rise to an aggressive marketing campaign aimed at getting consumers to switch checking accounts from other banks.

Additionally, nonaccrual loans and real estate owned from loan foreclosures fell to 2.45% of assets, from 4.7% of assets last year. Also, general and administrative expenses fell to $53 million, from $72 million.

While part of the expense reduction is attributable to the sales of the Florida and Washington units, other cost-cutting measures, including a new agreement to outsource data processing operations, and a consolidation of loan processing centers, also helped.

On the negative side, net interest income fell to $75 million, from $83 million last year, assets dropped $1.7 billion to $15 billion, and loan originations fell to $133.2 million, from $489.2 million.

Glenfed said deep discounting at other California thrifts was partially to blame for its loan origination decline.

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