UnionFed Posts $32.7-Million Annual Loss : Banking: Firm, hurt by real estate recession, has accumulated nearly $200 million in red ink.


UnionFed Financial Corp., which sold most of its savings and loan operations to maintain its solvency, posted another large annual loss, bringing its total losses over six years to nearly $200 million.

The holding company for Union Federal Bank lost $32.7 million, or $1.20 a share, for its fiscal year, which ended June 30, according to a document filed recently with the Securities and Exchange Commission. The company lost $26.5 million, or $1.28 a share, for its previous fiscal year.

UnionFed, which moved its headquarters to Brea five years ago, returned recently to downtown Los Angeles, where the S&L; started 68 years ago.

The company had built Union Federal into a large regional operation with 14 branches in two counties and $2.5 billion in loans and other assets, including real estate joint ventures from California to the East Coast and Florida.

But the real estate recession hammered the thrift's portfolio, and Union Federal couldn't sell the devalued properties fast enough. Several times, it was nearly seized by federal regulators, but it picked up new investors and struggled on.

UnionFed's problems surfaced almost as soon as it moved to Brea. It revised its 1990 fiscal year profit to report a loss, and since then, has accumulated $196.3 million in red ink.

Earlier this year, the company sold 13 of the thrift's 14 branches and $820 million in deposits to Glendale Federal Bank for $6.9 million. It now operates a lone office in downtown Los Angeles with only $37.2 million in assets.

At the end of June, the S&L; failed to meet one of the three federal tests for capital, its final cushion against losses. The thrift expects to post an operating loss for its first quarter, eroding its capital further, according to the SEC document.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World