Glenfed Loses $106.7 Million

Glenfed Inc. on Friday posted a fiscal third-quarter loss of $106.7 million because of mounting real estate losses.

The parent of Glendale Federal Bank said the loss in the quarter ended March 31, which contrasts with a profit of $1.4 million a year ago, means the thrift fell out of compliance with certain capital levels that federal regulators require to shield an institution from future losses.

Both developments had been predicted by Glenfed three weeks ago, on the same day that Norman M. Coulson abruptly resigned as the S&L;’s chairman and chief executive. Glenfed, the nation’s fourth-largest thrift, had $19 billion in assets as of March 31.

Glenfed’s capital shortage means that, unless the company can somehow bolster its capital soon, regulators might pressure the S&L; into a merger or take control of it outright and put Glenfed up for sale.

The company’s third-quarter loss stemmed largely from its need to set aside an additional $131.8 million to cover bad loans, which have been growing because of the weak real estate market.

For the first nine months of its fiscal year, that loan-loss provision totaled $235.8 million, leaving Glenfed with a net loss of $55.1 million, compared to a year-earlier loss for the period of $93.4 million.