UnionFed Financial Posts $13-Million Loss : Earnings: The company blames the sagging California real estate market for its poor quarterly results.

UnionFed Financial Corp., racked by losses for nearly a year, blamed the sagging California real estate market for $13 million in additional red ink for its fiscal third quarter.

The holding company for Union Federal Savings Bank in Los Angeles said the loss for the quarter ended March 30 was almost entirely because of an increase to the thrift’s reserves against possible losses on its real estate loans and investments.

The company reported a net income of $4.2 million for its fiscal 1990 third quarter.

For the nine-month period, UnionFed lost $23.6 million; it had a $12.8-million profit for the same period last year.

The quarterly loss did not surprise analysts.

“There’s no quick fix when you’re going through what they’re going through,” said Larry Vitale, an analyst at the Keefe, Bruyette & Woods brokerage in San Francisco.

Throughout its troubled year, he said, UnionFed has had a “relatively strong capital base.” But the losses are eating away at that base, he said.

Thanks partly to a proposed federal accounting rule announced in mid-April, UnionFed maintained solid levels of capital--its final reserve against losses--meeting two of three strict federal standards for capital. It continued to fall short, though, on a third capital requirement that is based on the riskiness of its assets.

As required by law, the company filed a plan with regulators to raise its risk-based capital level. But because a new managing officer took over the company last month, and because regulators want to increase the capital requirements for thrifts, the company said it has agreed with regulators to submit a new capital plan by the end of this quarter.

David S. Engelman took over April 1 as UnionFed chairman, president and chief executive, replacing Roger L. Kringen, who retired.

The company has continued to reduce its assets as one way to improve is ratio of capital to assets. At the end of March, it had $2.3 billion in assets, down 4% from $2.4 billion a year earlier.

The company also is conducting its own evaluation of loans of more than $1 million as well as of its troubled loans. The company said those loans total fewer than 200.

Executives are uncertain whether the red ink will continue to flow, mainly because federal regulators are conducting a routine audit now. After an audit last summer, regulators forced UnionFed to make a dramatic revision in its fiscal-year earnings figure.

The company said then that new writedowns and reserves for losses on shaky out-of-state commercial real estate ventures turned an $11.1-million profit into an $18.1-million loss for the year ended June 30.

Recently, though, it has been California real estate that has been giving the company trouble, said Charles Holroyd, UnionFed controller. The sluggish market has wreaked havoc with the thrift’s loans and its investment in Uni-Cal Financial Corp., a subsidiary that invests in real estate developments and real estate joint ventures.

Under a 1989 federal law, thrifts must rid themselves of such subsidiaries. They have five years to recoup all the capital they provided to subsidiaries that own or invest in real estate ventures and other direct investments.

Reserves for Uni-Cal’s possible losses amounted to half the $20.2 million that the company socked away in the third quarter for future loan and real estate losses. The unit’s provision for reserves in the first nine months accounted for about 40% of the $38.1 million set aside for the period.

Union Federal’s $25 million in bad loans at the end of March accounted for 1.4% of its total loans, a figure that does not alarm regulators. But it also had $129.6 million in real estate it essentially owns through foreclosure. That amounts to 5.4% of total loans, and that figure has even the thrift worried.

UNIONFED’S PERFORMANCE

The Brea-based holding company for Union Federal Savings Bank in Los Angeles continued to suffer from the effects of a sour real estate market as it posted a loss of $13 million for its fiscal third quarter, which ended March 30.

Figures are in thousands, except per-share data.

3rd Qtr 3rd Qtr 9 Months 9 Months 1991 1990 1991 1990 Revenue $37,889 $47,157 $112,361 $154,071 Net income (loss) (12,950) 4,171 (23,598) 12,795 Per share (loss) ($1.74) $0.56 ($3.17) $1.90

Source: UnionFed Financial Corp., Brea

O.C. EARNINGS: PacifiCare, National Education Corp., ALR Inc. D8