Glenfed Says It May Post Loss in the Third Quarter

Glenfed Inc., the parent company of beleaguered Glendale Federal Bank, said Wednesday that it may lose money in the third quarter ending March 31 and will probably fail to meet federal capital requirements for thrifts.

Glenfed said profitability for the current quarter is “in question” because of the extended economic slump and continued deterioration in the real estate market. The company, which has 214 savings and loan offices in California, Florida and Washington state, has been shedding non-core operations and cutting costs for more than a year.

The company, which lost $232 million last year, said its loan problems likely mean that it will be unable to meet higher federal S&L; requirements for capital. Those funds provide a cushion against possible losses.

If Glenfed does not meet the new standards, it could be forced to give regulators a plan for raising additional capital and eventually could face operating restrictions.

The announcement came as the company restated its earnings for the three months ended Dec. 31 because of a change in accounting rules. The adjustment allowed it to record second-quarter earnings of $27.6 million, up from the previously reported $20.5 million.

The change means that the thrift met federal capital requirements as of the end of 1991.

Glenfed shares plunged $1.375 to $7.125 on the New York Stock Exchange. It was the biggest percentage loser on the NYSE, off 16.2%.