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VALLEY FEDERAL REPORTS NINE MONTH EARNINGS

 VALLEY FEDERAL REPORTS NINE MONTH EARNINGS
 VAN NUYS, Calif., Nov. 13 /PRNewswire/ -- Valley Federal Savings


and Loan Association (NASDAQ: VFEDC) today reported its seventh consecutive quarterly profit, with net earnings of $1.1 million, or $.20 per share, for its third quarter ended Sept. 30, 1991. This compares with net earnings of $5.5 million, or $.88 per share, for the same period in 1990.
 Net earnings for the nine months ended Sept. 30, 1991 were $8.3, or $1.44 per share, compared with $21.5 million, or $3.51 per share, in the prior year period.
 Operating earnings, before nonrecurring items, were $2.3 million and $9.1 million for the three-and nine-month periods ended Sept. 30, 1991. For the corresponding 1990 periods, operating earnings, before nonrecurring items, were $3.9 million and $13.6 million, respectively. Average total assets declined during the 1991 three-and nine-month periods by 15 percent and 12 percent, respectively, from the corresponding 1990 periods.
 At Sept. 30, 1991, nonperforming real estate loans and foreclosed properties were $99 million, up from $45 million at Dec. 31, 1990. Nonperforming real estate loans and foreclosed properties represented 4.2 percent and 1.7 percent, respectively, of total assets at Sept. 30, 1991 and Dec. 31, 1990.
 At Sept. 30, 1991, total loss reserves were $30 million, of which $16 million were general valuation reserves. As a percent to total real estate loans (excluding loans securitized) and foreclosed properties, general valuation reserves were 1.30 percent at Sept. 30, 1991, up from .60 percent at Dec. 31, 1990.
 For the 1991 three- and nine-month periods, loan loss provisions were $14.1 million and $19.2 million respectively. These provisions included additions to general valuation reserves for $12.1 million and $14.4 million, respectively. For the corresponding 1990 periods, loan loss provisions were $.8 million and $2.4 million. There were no additions to general valuation reserves during 1990.
 In spite of its two-year earnings record, Valley Federal had shareholders' equity of only $2.4 million at Sept. 30, 1991. Though substantially improved from negative shareholder's equity of $31.4 million at Dec. 31, 1989, Valley Federal still required an additional $140 million of total capital to comply with current regulatory minimums at Sept. 30, 1991. At Dec. 31, 1989, Valley Federal required an additional $265 million of total capital to satisfy its then minimum capital requirements.
 Valley Federal has an approved capital plan with the Office of Thrift Supervision (OTS) that requires compliance with regulatory capital minimums by Dec. 31, 1991. Valley Federal has no prospect of achieving capital compliance by this deadline.
 Valley Federal has applied to the OTS for an extension of the capital plan and the deadline for capital compliance. The OTS has refused. The OTS has executed an agreement under which it will place Valley Federal into the Accelerated Resolution Program (ARP). The ARP is a joint regulatory effort of the OTS and the Resolution Trust Corp. to assist in the sale of troubled savings associations. Valley Federal is considered troubled because it does not meet its minimum capital requirements. During the ARP process, current management continues to operate the institution, depositors are not affected and deposits remain insured to the full extent of the law. The shareholders of Valley Federal are unlikely to receive any consideration for their shares when Valley Federal is sold.
 Valley Federal's consolidated assets were $2.3 billion at Sept. 30, 1991, a decline from $2.7 billion at Dec. 31, 1990. At Sept. 30, 1991, Valley Federal maintained liquidity well in excess of regulatory requirements.
 Valley Federal currently operates 24 retail banking offices in California. The company's deposits are insured by the FDIC and backed by the full faith and credit of the United States Government.
 VALLEY FEDERAL SAVINGS AND LOAN ASSOCIATION
 Consolidated Financial Highlights
 (in thousands, except per share data)
 (Unaudited)
 Three months ended Nine months ended
 Sept. 30, Sept. 30,
 1991 1990 1991 1990
 Core earnings $2,348 $3,903 $9,108 $13,586
 Other
 activity(a) (2,095) 1,551 (565) 8,458
 Income taxes 819 --- (211) (578)
 Net earnings $1,072 $5,454 $8,332 $21,466
 Earnings per
 share(b) $0.20 $0.88 $1.44 $3.51
 Sept. 30, Dec. 31,
 1991 1990 1990
 Total assets $2,322,656 $2,720,706 $2,688,133
 Real estate loans
 and mortgage-
 backed
 securities 1,922,097 2,294,790 2,223,973
 Deposits 1,826,811 1,935,398 1,888,023
 FHLB advances and
 borrowings 471,147 759,750 777,517
 Stockholders'
 equity (deficit) 2,362 (9,923) (5,681)
 Yield on loans
 and investments 9.08 pct. 10.17 pct. 9.97 pct.
 Cost of funds 6.93 pct. 8.29 pct. 8.20 pct.
 Stated interest
 margin 2.15 pct. 1.88pct. 1.77 pct.
 Shares outstanding 5,523 5,873 5,873
 (a) Includes gains and losses from sales of development real estate (all periods), adjustments of mobile home asset receivables ($5,000 - 1991 third quarter, $3,200 - 1991 second quarter), a recovery of Los Angeles City Tax ($8,000 - 1991 third quarter), a provision for branch closure costs ($2,500 - 1991 third quarter, $3,310 - 1990 third quarter), additions to general loan loss reserves ($12,100 - third quarter, $1,175 - 1991 second quarter, $1,100 - 1991 first quarter), a net gain from the sale of savings deposits and facilities ($4,504 - 1990 first quarter), a net gain from the sale of real estate loans and real estate loan servicing rights ($3,658 - 1990 third quarter, $1,000 - 1990 second quarter).
 (b) Earnings per share for the three and nine months ended Sept. 30, 1990 include the effect of preferred stock dividends.
 -0- 11/13/91
 /CONTACT: Scott A. Braly of Valley Federal Savings, 818-904-3755; or Craig A. Parsons or Kim P. Feazle of Rifkind Pondel & Parsons, 213-207-9300, for Valley Federal Savings/
 (VFEDC) CO: Valley Federal Savings & Loan Assoc. ST: California IN: FIN SU: ERN EH-SE -- LA003 -- 3780 11/13/91 09:06 EST
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Date:Nov 13, 1991
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