FCA’s Net Tumbles 78% in Quarter, Rises in Year

Financial Corp. of America, struggling to overcome a big load of foreclosed property, said its profit fell by 78% in the fourth quarter but rose 79% for the year.

For the three months ended Dec. 31, the nation’s largest thrift holding concern had net income of $23.1 million. A year earlier, it earned $97 million, but that included a $43.7-million gain from tax-loss credits.

During the quarter, Irvine-based FCA increased its provision for loan losses by $302.2 million, citing further deterioration in loans made in oil-dependent Texas and a slump in commercial real estate nationwide.

The action raised FCA’s total loan-loss reserve to $799.7 million.

FCA posted an operating profit of $18.9 million for the quarter--its first such gain in a year. The last time the company showed an operating profit was in the final period of 1985, when it posted a gain of about $16 million.

For the full year FCA earned $95.4 million, compared to a profit of $53.2 million for 1985.

The company’s biggest gain in revenue came from the sale of loans and mortgage-backed certificates. Those rose by 5.9% to $304.1 million for the fourth quarter and by 62.3% to $568.2 million for the year.

FCA’s interest income was up by 3.2% to $703.7 for the quarter but was down by 8.3% to $2.54 billion for the year.

FCA’s sale of foreclosed property totaled $725.2 million in 1986. But because of new foreclosures, the company’s portfolio of troubled assets remained at $1.66 billion, compared to $1.75 billion at year-end 1985. The problem assets peaked in February, 1986, at $1.98 billion.