Financial stocks took a drubbing on Wall...

Financial stocks took a drubbing on Wall Street on Monday as a Barron’s article highlighted the potential risks and possible losses in financial institutions’ real estate portfolios, said Irving Katz, director of research at Thomas Green/San Diego Securities.

Real estate markets continue to soften on the Eastern Seaboard, and the inventory of unsold homes in the major cities of California continues to climb as prices meet buyer resistance, Katz said.

HomeFed Corp, which had seen its assets grow with the booming California real estate market, took the largest hit, dropping $2.25 Monday to close at $28.50. The stock, which sold at $47.50 a few months ago, is selling at 30% below its tangible book value of $40.55 a share.

Great American Bank fell to a new low of $6, adding to its long string of weekly lows as investors consider its Arizona real estate losses and potential losses in California.

Imperial Corp. of America, which closed at $1.625, down from its 52-week high of $9.125, announced after the market closed Monday that it has a negative tangible book value and its junk bond portfolio continues to deteriorate.

First National Corp., which has been a rumored merger and buyout candidate and which sold as high as $23.125 over the past year, closed Monday at $16.875, down $.875.