UnionFed Financial Reports New Loss

UnionFed Financial Corp., losing money for four straight years, got off to a bad start in its latest fiscal year when it reported on Friday a $3.7-million loss, or 14 cents a share, for its first quarter.

The holding company for Union Federal Savings Bank lost $4.1 million, or $3.10 a share, for last year’s fiscal quarter. The per-share loss was lower this year because the company’s stock was diluted late last year in a secondary offering that raised $44.1 million.

The loss for the three months that ended Sept. 30, gives the thrift holding company a total of $167.3 million in red ink since it restated earnings in 1990 to post a loss for that fiscal year.

UnionFed, which is trying to sell the savings and loan, said it had to stash $3.9 million in reserves for loan losses mainly because of two real estate loans on income properties that were reappraised and then written down to fair market value.

The company said the thrift doesn’t have enough money to meet two federal requirements for capital adequacy--its final reserve against losses--but still meets a third requirement. The thrift fell out of compliance on the first two measures with its $26.5-million annual loss at the end of June.

David S. Engelman, the company’s chairman, said the S&L; continued to reduce bad loans and non-paying real estate, selling $9 million in the past three months to leave it with $54 million of troubled assets.

Under federal regulations, the thrift is now considered to be undercapitalized and last month was required to file a plan with regulators to attract more capital or sell the thrift.