Where no man has gone before; mountaineer Stephen Trafton scales a new challenge: rescuing financially endangered Glendale Federal Bank.

Thrift giant Glendale Federal Bank is facing an uphill battle in its fight for survival as an independent institution. Battering the savings and loan are the icy, howling winds of a hostile economic and regulatory environment. One slip and all may be lost.

But Glendale Federal's holding company, Glenfed Inc., has a new president who has confronted frigid gusts, unforgiving ascents and rescue missions before.

Newly appointed President Stephen Trafton, you see, is a world-class mountaineer, a man who has made 100 ascents of peaks above the arctic circle previously untouched by humans and who has participated in 209 rescue missions.

He has met plenty of challenges along the way -- including a brush with death that says plenty about his response to crisis.

In 1979, an avalanche carried Trafton's five-man team 1,200 feet down the side of a mountain and buried them 10 feet deep in snow.

"I heard a tremendous roar and saw a whole slope a half-mile wide and a half-mile deep coming down toward us," recalls Trafton. "I felt with absolute certainty that I had five to 10 seconds to live. This was the end of it."

Trafton watched it swallow up other members of the team and then heard a whoosh as the wave of snow passed over him, sucking air behind it. "I expected my legs and arms to break. All of a sudden, it stopped and I realized I was still alive and there was airspace."

Encased in a cocoon of snow and ice, Trafton thought he was blind until he realized ice had become encased between his eyes and his glasses. Trafton then spit. When the spittle dropped away from his face, he realized he was upside down. He righted himself and dug himself -- and later others -- out of the snow.

All of the party survived and Trafton, who now reports to Glenfed Chief Executive and Chairman Norman Coulson, escaped "with a few broken ribs and a dislocated shoulder."

That was typical Trafton, says friend and climbing partner Al Errington: "When everything is falling apart around everyone, he's probably already got two solutions refined in his head. He's really unflappable."

If anyone can save Glendale Federal, ailing from increased real estate loan losses, forced write-offs of intangible assets and ever higher capital requirements, it is Trafton and his restructuring of the S&L, said analysts.

"I think he walks on water," says Peter Treadway, analyst for stock brokerage Smith Barney, Harris Upham of New York. "He's terrific. I wish he'd been on at Glenfed a lot earlier. I'm not sure walking on water is enough, given the attitude of the regulators toward second-tier thrifts."

Second-tier thrifts are large but marginally capitalized S&Ls like Glendale Federal, Los Angeles-based California Federal Bank, Los Angeles-based Coast Federal Bank and San Diego-based HomeFed Bank.

In early November regulators dropped a bombshell that shocked the industry when they drastically increased the capital reserves California Federal was forced to carry against potential loan losses. It gave CalFed only until June 30, 1992, to meet the new standard -- a move some industry experts said was equivalent to putting cement shoes on a struggling swimmer.

The difference between Glendale Federal and CalFed?

It's largely the more aggressive cost-cutting program designed and implemented by Trafton since he joined the institution -- the fourth-largest S&L in the nation with assets of $21.3 billion -- in July 1990 as chief financial officer.

The new program resulted in savings of $40 million of recurring expenses in the 1992 fiscal first quarter ended Sept. 30. That allowed the institution to earn profits of $17.1 million for the quarter, marking a turnaround from losses of $231.7 million in 1991, red ink in part reflecting restructuring charges.

Trafton, 45, has a three-stage plan for reforming the thrift, the first two steps of which have been completed.

First, he cut away the fat at the institution, eliminating $160 million in expenses in March and April, paring the management structure from 10 levels to five and cutting 2,500 jobs of 6,000 total at the company.

"We've turned the corporate pyramid upside down and made customer contact at the levels of the tellers and the branch managers be at the top of the pyramid," says Trafton.

He next examined the ailing thrift's asset portfolio. He also tightened credit quality standards and accounted for problem loans at the institution by adding reserves of $218 million to satisfy potential losses.

Credit quality, however, has a lag; Trafton and company can only hope that borrowers keep on paying off the loans put on the institution's books by his predecessors.

The third phase, which began this quarter, is redirecting the S&L into the most suitable operations.

Trafton -- who says that 11 years of consulting and working for restructuring banks taught him that the most common problem of institutions is diversifying beyond their areas of expertise -- is redirecting Glendale Federal's efforts to focus on lending to homebuyers in small communities.

The bank is phasing out commercial real estate and construction lending, as well as non-core financial subsidiaries.

What Trafton didn't do at Glendale Federal was unload the S&L's assets in a fire sale to try to quickly raise money to boost the institution's capital ratios.

"Many institutions sold off their best assets in futile attempts to meet capital requirements," he says. "That's a mistake. The only way to fix it is to work on the core earnings stream. If that can't be fixed, the bank can't be fixed."

Trafton vows to fight to the end to avoid being forceably acquired. "We didn't let 2,500 people go and go through that pain and agony simply to lose the game in the long run," he says.

One possible solution would be a merger of Glenfed with CalFed. The two institutions came close to merging in 1989 before backing out due to management head-butting. The institutions are again discussing the possibility of merging, according to published reports which Trafton will neither confirm nor deny.

A subtle irony of the restructuring is that it is being carried out by a chief financial officer -- Trafton retains that title -- who has not taken a single class in finance. Trafton received a degree in zoology from Washington State University in 1968 and was contemplating a graduate degree in life sciences when a summer job as a safe deposit clerk at Seattle First National Bank changed his mind.

By fall he was working in the bank's investment department as a money market trader. "I was fascinated by multiple, simultaneous trades," he explains.

Trafton says his lack of a financial background is, if anything, an advantage.

"I used to worry early on, but it has worked to my advantage. I have a different approach that's non-academic and more pragmatic and solution-oriented, which is easier because it's not bogged down by the academic baggage of management and accounting. Those with academic backgrounds are better at defining (problems) than solving them."

Coulson praises Trafton as a financial engineer who knows how to look at a company from the ground up and make strategic decisions about how to deploy assets and liabilities.

"Hiring him was one of the best decisions I've made in a while," Coulson says. "He's very focused, articulate, creative and motivated and he brings out the best of the people he works with."

Raising morale in the face of adversity is something Trafton may have learned from his mountain-climbing activities, says Errington.

"When the weather is bad and spirits are down and everyone wants to go home, he does something outrageous to keep them going -- like running in his underwear chasing a deer for the pleasure of all onlookers," says Errington, an engineer at Boeing Co. in Seattle.

Trafton says he was happy to accept the challenge of coming to Glendale Federal in California from his last position, senior executive vice president and treasurer at Goldome Bank of New York, in part because "I was very interested in getting closer to the mountains."

Growing up in the foothills of the Cascade Mountains near Seattle, Trafton starting skiing at the age of seven. He and his friends enjoyed skiing so much they began to climb the mountains to where the best snow was.

"It became more the climb than the skiing that I enjoyed," says Trafton, who was involved in serious mountain climbing by college and participated as a member and later chairman of the Seattle Mountain Rescue Council.

In 1975, he and longtime friend Errington decided to do something no one else was doing: climbing mountains in Alaska and Canada near the North Pole.

Trafton, who also writes for journals of arctic history and listens to classical music, continues such activity today. While some might say that's rather risky for a high-ranking executive of a major bank, Trafton disagrees: "It's not so dangerous as awe-inspiring to be dropped off for one month to be by yourself. I live to be someplace no one has been before."

Trafton has also lived on the edge in his professional life. After a 10-year tour of duty at Seattle First, he has spent most of career at investment firms, as an independent consultant or as a bank employee working to restructure banks and troubled S&Ls.

In some cases, the patients were too far gone to be saved. From 1988 to mid-1990, Trafton labored as part of a rescue team trying to save Goldome Bank of New York, only to see the thrift seized by regulators in June 1991.

Trafton worked to restructure and improve the bank's balance sheet but saw the bank's hopes of survival ebb away because of a Federal Deposit Insurance Corp. decision not to help private investors recapitalize the bank.

"Had the regulators shown more flexibility in solving the problems, Goldome would be alive and well today," he said.

From 1980 to 1984, Trafton was also executive vice president and treasurer of Gibraltar Savings Bank of Beverly Hills, which was seized by the RTC in 1989 because of risky loans that were made largely after Trafton's departure.

"We solved the earnings stream problem, but they were later killed off by credit risk," says Trafton, noting the S&L's subsequent expansion into junk bonds and Texas real estate.

Glenfed, he says, is different: "It has a substantial franchise to build on and a market position worth working with. It also has earnings stream potential. It's a soluble problem."