Glenfed Losses Widen to $19.9 Million in 1st Quarter

Glendale Federal Bank’s net loss for the first quarter of fiscal 1994 widened to $19.9 million from $16.8 million in the year-ago period, following the ailing thrift’s recently completed recapitalization.

The results for the quarter that ended Sept. 30 included a $14.1-million extraordinary gain related to the recapitalization.

In fiscal 1993’s first quarter, Glendale Federal’s results included a $35.4-million gain from the sale of mortgage securities and a $4.1-million extraordinary loss from prepaid debt.

The company blamed the loss in the latest quarter primarily on the provision it has had to make for possible loan losses because of the economic and real estate slump in its California markets. But its loan-loss provision declined in the latest three months for the third quarter in a row, to $44.9 million from $63.8 million a year ago.

Glendale Federal’s Chairman and Chief Executive Stephen J. Trafton said, “We are encouraged by the continued, gradual improvement in asset quality we have been able to achieve.”

The bank’s net interest income before the provision for loan losses fell 28%, to $71.3 million from $98.6 million in last year’s first quarter. Net interest income is the difference between the interest a bank pays on deposits and the interest it earns on its assets.

During the first quarter, Glendale Federal’s total assets edged up 1%, to $18 billion from $17.8 billion in the same period a year ago.