Coulson Quits Ailing Glenfed : Chairman Departs as Firm Predicts a $110-Million Quarterly Loss

Norman M. Coulson, chairman and chief executive of Glenfed Inc., abruptly resigned Wednesday as the giant but ailing thrift predicted that it will post a $110-million loss in the quarter ending March 31 because of continuing real estate problems.

Glenfed, the nation’s fourth-largest S&L; with about $20.6 billion in assets, said the third-quarter loss means it won’t meet certain capital levels that federal regulators require to cushion a thrift against future losses.

If it fails to bolster its capital levels soon, the thrift would face seizure by regulators, or it might be pressured into a merger. Glenfed has been seeking new capital and last year discussed a possible merger with another ailing thrift, CalFed Inc.

The loss is a setback for the Glendale-based thrift, which over the last few months has been touting what appeared to be a turnaround in its fortunes led by aggressive cost-cutting.

Glenfed is one of several major California thrifts whose fate now hangs on a controversial plan being promoted by thrift regulators whose aim is to rescue ailing savings and loans before they fail. The plan involves arranging a merger with a deep-pocketed partner, which would be protected against losses by taxpayers while salvaging some equity for existing shareholders. The proposal, however, prompted criticism Wednesday at a hearing in Washington that it would further hurt taxpayers.

Coulson, 59, resigned from the two top posts of Glenfed and its main unit, Glendale Federal Bank, ending a 30-year career at the concern. He handed his resignation letter to board members Tuesday at the board’s regular monthly meeting. The company’s announcement of his departure did not contain any of the customary accolades departing chief executives often receive, leading some executives and consultants to conclude that it may have been involuntary.

But Glenfed spokeswoman Judy Cunningham adamantly denied that regulators forced Coulson out, saying it was his choice alone. She said his departure “is not a result of the announcement today” regarding Glenfed’s ongoing troubles.

Still, the announcement was a surprise to the industry. “Coulson has been a fixture there for so long,” said thrift consultant Bert Ely of Alexandria, Va.

Coulson was succeeded as chief executive of both entities by Stephen J. Trafton, 45, who joined Glenfed less than two years ago. Trafton has taken an active, highly public role at the thrift, leading many industry executives to conclude that he would soon succeed Coulson. Trafton also serves as vice chairman and chief financial officer of Glenfed and president and chief operating officer of the bank.

A successor for Coulson as chairman of Glenfed’s board has not yet been named.

Coulson was not in his office Wednesday and could not be reached for comment on why he quit. Trafton also could not be reached.

Coulson leaves as the company’s hoped-for recovery keeps slipping away. Glenfed has been hammered in recent years by the recession and the real estate slump, which has steadily eroded the value of its loan portfolio.

After losing $231.7 million in its fiscal year ended June 30, 1991--which included a loan-loss provision of $336.2 million--Glenfed turned a $51.6-million profit for the first half of its current fiscal year and touted the progress made by its new strategy of cutting costs and focusing on traditional residential real estate lending.

But the progress then evaporated as new problem loans surfaced. Glenfed said Wednesday that it will record a loan-loss provision and other charges totaling $210 million in the latest quarter, leading to the net loss. The company in February had warned that a loss might be coming, but had not specified its size.