Takeover Possible as HomeFed Misses Deadline : Thrifts: The San Diego-based S&L; said it lost $35.6 million in the fourth quarter ended Dec. 31. It has asked for more time to recapitalize.
San Diego-based HomeFed Bank on Tuesday missed a regulatory deadline to raise more capital and reported continuing losses in the fourth quarter, increasing the prospects of a government takeover.
The thrift, crippled by bad real estate loans, said it lost $35.6 million in the fourth quarter ended Dec. 31. That brings its losses for 1991 to $807.7 million.
The continued deterioration of HomeFed’s condition prompted its accountant to issue a qualified financial report saying it was uncertain if the thrift “can continue as a going concern.”
HomeFed, one of the nation’s largest savings and loans, with assets of $13.9 billion, has been under pressure for two years. In 1990, the company lost $248 million, including $175.7 million in the fourth quarter.
The latest losses leave the 209-branch thrift $410 million short of the capital levels required by regulators. The Office of Thrift Supervision set a March 31 deadline for the S&L; to find a buyer or raise about $500 million in new capital.
Thomas J. Wageman, the thrift’s chief executive, said HomeFed was making progress on a recapitalization plan, and the thrift has asked regulators to extend the deadline. Thrift regulators declined to comment on whether they would grant the request.
“More time is required to finalize the proposal, which would require federal assistance,” Wageman said. He declined to discuss specifics of the recapitalization plan.
Analysts give HomeFed little chance of attracting new money in a market now glutted with troubled institutions.
HomeFed blamed the continuing flow of red ink on deteriorating real estate values in California and the rest of the country. The S&L; set aside about $68.7 million in loan-loss provisions for the quarter and just under $800 million for all of 1991.
“There is no indication it’s improving,” Wageman said when asked in an interview to assess the real estate market in general.
He added that “there is no assurance that shareholders will retain any value in the company even if a recapitalization is achieved.” HomeFed shares closed down 12.5 cents at $1.125 in New York Stock Exchange trading.
Campbell Chaney, bank analyst with Sutro & Co. investment bankers in San Francisco, said that unless HomeFed has an investor or plan in hand, regulators will probably take the thrift over when a congressional appropriations bill is passed, possibly later this month.
HomeFed’s bad loans continued to grow over the quarter. As of Dec. 31, non-performing assets, or loans in default or foreclosure, totaled a staggering $2.1 billion, or 14.8% of its assets. That compares to bad loans of $1.2 billion, or 6.44% of its assets, at the end of 1990.
