UnionFed’s 3rd-Quarter Losses Down : Banking: Struggling parent company of S&L; is meeting goals of federally approved plan to comply with capital standards.

UnionFed Financial Corp., which has been bleeding red ink for two years, said Thursday that it has dramatically trimmed its losses and is on target with a recovery plan that has been approved by federal regulators.

The struggling parent company of Union Federal Savings Bank reported a loss of $1.5 million, or 19 cents a share, for its fiscal 1992 third quarter, which ended March 31.

The loss is a substantial improvement over the loss of $13 million, or $1.74 a share, reported a year ago.

Quarterly revenue, however, fell 22%, to $29.5 million from $37.9 million in the company’s fiscal 1991 third quarter.

The continuing red ink has mounted to a loss of $17.4 million, or $2.33 a share, for the first nine months, compared to a $23.6-million loss, or $3.17 a share, for the same period last year. But revenue for the period dropped 31%, to $97.6 million from $140.7 million for the same period last year.

Union Federal Savings, operating under a consent agreement with federal regulators, exceeds federal requirements for two levels of capital but falls $29 million short of meeting the third test of capital soundness, based on the riskiness of its loans and investments.

For Union Federal, the losses have come as much from a quagmire of bad loans as from the real estate projects it has invested in. Federal law now requires that such investments be reduced or eliminated by mid-1994.

Last fall, the Office of Thrift Supervision approved a plan by the savings and loan to increase its capital to comply with all three standards by the beginning of 1994. The plan also established interim requirements, which, UnionFed said, the savings and loan has met.

To help improve its capital ratios, the company also reduced its assets to $1.7 billion at the end of March from $2.3 billion a year earlier.

“We continued to aggressively manage the problem assets of the bank,” David S. Engelman, the company’s chairman, said in a statement issued Thursday. “Despite the continuing difficult real estate market, we are making progress in liquidating non-performing assets and restructuring troubled loans to an earning status.”

UnionFed’s real estate development activities, conducted through an S&L; subsidiary called Uni-Cal Financial Corp., had been a major source of problems because Uni-Cal’s holdings were devalued last year, resulting in large losses.

But the real estate operation has cut those losses in half for the third quarter, to $7.2 million from $15.4 million a year earlier.

For the first nine months, however, the loss is nearly the same: $29.2 million this year, $28.3 million last year.

As the recession worsened last year, bad loans multiplied, causing further losses.

The thrift has managed to cuts its non-performing loans to $190.4 million from $208.9 million, but an increase in the amount of slow-paying loans that were restructured gave it a total of $252.2 million in questionable loans, compared to $250.1 million a year ago.