HomeFed Profit Sinks; Citicorp Plans Big Layoff : Banking: Beset by a bad real estate market and a slowing economy, financial institutions everywhere are hurting.

HomeFed Corp. on Wednesday joined the ranks of large thrifts and banks reporting poor third-quarter profits linked to a worsening real estate market and an slowdown in the national economy.

HomeFed Corp., the San Diego-based parent of HomeFed Bank, the nation’s sixth-largest thrift, reported that net income for the third quarter ended Sept. 30 fell 92% to $1.9 million from $23.9 million a year ago.

Separately, UnionFed Financial Corp., a medium-sized thrift based in Brea, restated its earnings to reflect a loss of $30.9 million in its fourth quarter ended June 30. The thrift, parent of Union Federal Savings Bank, previously reported that it lost only $1.7 million in the quarter. Regulators forced the thrift to write off or lower the value of troubled commercial real estate loans.

Besides HomeFed, other major financial institutions reporting lower earnings Wednesday included Glenfed Inc., NCNB Corp. and Fleet/Norstar Financial Group Inc.

Meanwhile, New York banking giant Citicorp warned in a meeting with securities analysts that it will lay off thousands and that the cost of the layoffs has yet to be recognized in its earnings. The analysts said the job cuts in the continuing program will likely total 5,000, at a cost of $100 million.

This has been a terrible week for banks and thrifts, as major institutions throughout the country posted weak earnings or losses. Earlier this week, such major institutions as Great Western Financial Corp. in Beverly Hills, Security Pacific Corp. in Los Angeles and Citicorp reported sharp declines in earnings stemming from real estate-related problems and the softer economy.

HomeFed was hurt by having to set aside additional money for possible losses on loans and reduced income from real estate operations. While the thrift experienced continued weakness in its commercial real estate and apartment loan portfolios, HomeFed was also hampered by a statewide slowdown in single-family home construction, Chief Executive Robert F. Adelizzi said.

While HomeFed continued to be plagued by its commercial real estate loan portfolio, the San Diego-based S&L;’s performance was “in line” with third quarter reports by other major banks and thrifts in California, said Gary Gordon, a Paine Webber Inc. analyst in New York.

“It’s a case of misery loves company,” Gordon said. “There’s a clear problem, no question about it, in the commercial real estate market. It’s been growing outside of California and now it’s a growing problem within California.”

Although down, earnings for Glenfed, parent of Glendale Federal Bank, were better than most. Its profit fell 9.6% in the third quarter from a year earlier, when the thrift had substantial gains on the sale of fixed-rate loans a year earlier. The Glendale-based thrift said earnings in its basic business, which excludes the sale of loans and investments, rose from $9.9 million to $34.2 million.

Elsewhere across the country, NCNB, the nation’s seventh-largest bank holding company, said its third-quarter earnings fell nearly $87 million due to problem loans and deterioration in the economy. The bank reported net income for the quarter of $57 million, down from $143.6 million a year earlier. Fleet/Norstar Financial Group, based in Providence, R.I., reported earnings in the third quarter of $38 million, down from $96 million a year earlier.

Times staff writer James Granelli contributed to this story.