HomeFed Bank Suffers Loss of $485 Million

As expected, HomeFed Bank on Tuesday reported a huge third-quarter loss that rendered it insolvent by regulatory standards. The troubled San Diego-based savings and loan also said it plans to lay off 200 additional workers by January.

The 209-branch thrift said it still hopes to beat a March 31 deadline imposed by federal regulators for attracting $600 million to $800 million in outside capital or face federal seizure. HomeFed Chief Executive Thomas J. Wageman said the thrift has contacted 30 potential sources for capital infusions.

Analysts, however, give HomeFed little chance of avoiding a takeover. The thrift has been gravely wounded by commercial real estate loan losses in California and other states. HomeFed stock closed at 44 cents a share, down 6 cents in New York Stock Exchange trading Tuesday.

Wageman said Tuesday that the S&L; lost $485.7 million for the quarter, due mainly to loan-loss provisions and restructuring charges amounting to $495 million. The loss leaves HomeFed with negative balances in so-called tangible, core and risk-based capital. HomeFed had said earlier this month that it would report a massive loss.

The thrift’s nonperforming assets continued to rise, reaching $1.8 billion as of Sept. 30, or a staggering 11.9% of its $15.2 billion in total assets, up from $1.6 billion in bad assets on June 30 and $1.2 billion on Dec. 31.

HomeFed also reported a $400-million reduction in deposits during the month of October, precipitated in part by HomeFed’s announcement on Oct. 8 that it expected a huge third-quarter loss. Some skittish depositors withdrew funds after the announcement, Wageman said, but not as many as the S&L; had feared. HomeFed deposits currently total about $10.4 billion, down from $11.3 billion on June 30 and $13.7 billion on Dec. 31.