Valley Federal Thrift Goes Up for Sale

Troubled Valley Federal Savings & Loan said Wednesday that it has put itself up for sale to raise money to meet federal capital requirements.

The Van Nuys-based thrift said it has retained the investment banker Shearson Lehman Hutton to find a buyer because of the large capital infusion necessary to meet those requirements. The thrift also said that the federal Office of Thrift Supervision asked it for a plan to meet the capital requirements by June 30, 1991--about 3 1/2 years earlier than under an earlier plan Valley Federal filed.

In addition, Valley Federal reported that after losing $138 million during 1989, it earned $9.7 million for the first quarter ended March 31. About $4.5 million of that stemmed from asset sales, but the results marked a clear improvement from the year-ago quarter, when the S&L; posted a net income of $178,000.

In January, the OTS imposed restrictions on Valley Federal that prevented the thrift from even originating new home loans while the agency reviewed the earlier plan for complying with capital regulations by Dec. 31, 1994. Those controls remain in effect.

The controls were imposed because Valley Federal, battered by losses at a subsidiary that made loans for mobile homes, fell about $90 million short of interim capital requirements. That gap had narrowed to about $78 million as of March 31.

But the requirements that thrifts must meet at the end of 1994 are even more strict than the interim standards.

Valley Federal said it will need about $135 million to meet those tougher capital standards. The thrift said in its annual report, released Wednesday, that despite improved earnings, “the only feasible way to obtain an infusion of this magnitude will be for a third party to acquire Valley Federal.”