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GLENFED INC. REPORTS RESULTS FOR FOURTH FISCAL QUARTER AND FISCAL YEAR ENDED JUNE 30, 1992; RESTATES CERTAIN INTERIM PERIOD RESULTS

GLENFED INC. REPORTS RESULTS FOR FOURTH FISCAL QUARTER AND FISCAL

YEAR ENDED JUNE 30, 1992; RESTATES CERTAIN INTERIM PERIOD RESULTS
 GLENDALE, Calif., July 31 /PRNewswire/ -- GLENFED Inc. (NYSE: GLN), parent of Glendale Federal Bank, today reported a net loss of $26.0 million, or $.76 per share, for the company's fourth fiscal quarter ended June 30, 1992, vs. a net loss of $136.7 million, or $3.99 per share, in the fourth fiscal quarter a year ago. For the fiscal year ended June 30, 1992, GLENFED reported a net loss of $120.9 million, or $3.53 per share, vs. a net loss of $230.1 million, or $6.74 per share, for the 1991 fiscal year.
 After reviewing certain balance sheet restructuring activities of Glendale Federal in the course of the recently concluded regulatory examinations and in consideration of evolving accounting practices relating to investments in debt securities, the company has reclassified as "held for sale," retroactive to June 30, 1991, its entire fixed-rate mortgage-backed securities portfolio. The effect of this reclassification is to carry these securities at the lower of aggregate amortized cost or aggregate market value and to include in income in subsequent periods changes in their carrying value. The company's statement of financial condition as of June 30, 1991, was restated to reflect the reclassification of $1.0 billion of mortgage- backed securities to loans and mortgage-backed securities held for sale. In addition, the company's net loss for the quarter ended March 31, 1992 was restated from $106.7 million to $146.6 million as a result of recording a pre-tax valuation allowance of $54.5 million to reflect the market value of these securities. The results for the quarter ended June 30, 1992 include $42.5 million of pre-tax income resulting from a reduction of the valuation allowance to $12.0 million at June 30, 1992 due to an increase during the quarter in the market value of these securities. During July 1992 the bank sold its remaining portfolio of approximately $1.4 billion of fixed rate mortgage-backed securities for a net gain of approximately $30 million, including the reversal of the valuation allowance at June 30, 1992.
 Also included in the fourth quarter results are significant provisions for losses and real estate asset value adjustments resulting from persistent weakness in the economy and continued deterioration in California real estate markets. GLENFED recorded a $78.7 million provision for loan losses in the quarter, and a provision of $12.4 million for losses related to its real estate acquired in settlement of loans. In addition, the company adjusted downward by $30.6 million the carrying value of its real estate investments, primarily related to its real estate development subsidiaries. These loss provisions and writedowns, and the resulting reserve levels, incorporate the findings of the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corp. (FDIC), which completed a joint examination of the bank in July.
 Chairman and Chief Executive Officer Stephen J. Trafton said, "Glendale Federal Bank's net interest income before provision for loan losses during Fiscal 1992 was sufficient to cover its operating expenses, goodwill amortization, and all provisions for loan losses related to its core banking business. However, the non-core subsidiaries of the bank, which are primarily engaged in commercial (asset based) lending and real estate development, recorded pre-tax losses of $214.7 million during the current fiscal year and $338.0 million during fiscal 1991. During the past 24 months, the total assets of these subsidiaries have declined from $1.3 billion to $341 million. The ratio of reserves to total loans outstanding in the commercial finance subsidiaries at June 30, 1992 was 21.2 percent. We are pleased with the progress we have made in liquidating these non-core activities of the bank."
 GLENFED's net interest income before provision for loan losses totaled $121.4 million in the fourth quarter, and $503.8 million for fiscal 1992, compared with $122.9 million and $469.1 million for the fourth quarter and full year of Fiscal 1991, respectively. GLENFED's net interest rate spread (the difference between the rate on earning assets and cost of funds) was 2.99 percent at June 30, 1992, compared with 2.98 percent at June 30, 1991.
 Operating expenses (excluding goodwill amortization) totaled $77.0 million for the quarter, and $291.2 million for fiscal 1992, compared with $91.5 million and $427.3 million for the fourth quarter and full year of fiscal 1991, respectively. Approximately 37 percent of the reduction in operating expenses for fiscal 1992 resulted from the sale of the company's title insurance subsidiary, which was completed in March l991.
 The ratio of net interest income (before provision for loan losses) to operating expenses (excluding goodwill amortization) was 1.58 to 1 for the quarter and 1.73 to 1 for the year ended June 30, 1992, compared with 1.34 to 1 and 1.10 to 1, respectively, for the comparable periods a year ago.
 Non-performing assets and restructured loans totaled $827.1 million at June 30, 1992, compared with $712.1 million at June 30, 1991, and $930.4 million at March 31, 1992. Included in the June 30, 1992 totals above are $472.5 million in non-accrual loans, $281.8 million in real estate owned (real estate acquired in the settlement of loans), and $72.8 million in restructured loans (which provide earnings to the company). At June 30, 1992, loan loss reserves totaled $281.4 million, representing a ratio of reserves to non-accrual loans of 60 percent and a ratio of reserves to total non- performing assets and restructured loans of 34 percent.
 "While the recent decline in the level of non-performing assets is a favorable development, it is important to realize that the decline is the net result of $142.2 million in additions to non- performing assets during the quarter, offset by $82.1 million in charge-offs and writedowns and $163.4 million primarily in sales and paydowns." Trafton noted, "The company still faces significant uncertainties in the California economy and real estate markets."
 On June 25, 1992, GLENFED announced that the bank had agreed with the OTS to file an amendment to its capital restoration plan, originally submitted to the OTS on June 1, 1992. The amendment will provide for the bank to achieve regulatory capital ratios of 5 percent core capital and l0 percent risk-based capital by June 30, 1993. The OTS has made no commitment to approve the bank's amended capital plan.
 At June 30, 1992, the bank had capital ratios of 2.02 percent tangible capital, 3.06 percent core capital, and 6.85 percent risk- based capital. The mandated federal requirements at June 30, 1992 were 1.5 percent, 3.0 percent, and 7.2 percent, respectively.
 In a U.S. Claims Court opinion released on July 24, the court found in favor of Glendale Federal Bank in its suit against the U.S. government, ruling that the government breached its express contractual commitment to permit the bank to include supervisory goodwill in its regulatory capital and that the bank is entitled to seek financial compensation. The court's ruling concerns the government's breach of contract only and does not address the question, which would be considered at a later time, of the amount of compensation, if any, that the government may be liable to pay to the bank. A final resolution of this case in the court system could take several years. In view of the bank's current capital position, the company is seeking to initiate settlement discussions with the government which could substantially improve its capital position. The company believes settlement would be in the best interests of the government and its stakeholders: shareholders, debt holders, customers, employees and the communities in which the bank operates. There can be no assurance that the government will agree to engage in settlement discussions or that such discussions will result in any settlement.
 During the fourth quarter of fiscal 1992, Glendale Federal Bank received the results of a regulatory review of the bank's compliance with the Community Reinvestment Act (CRA). The bank's CRA rating was elevated to a "satisfactory" rating. In Fiscal 1992, Glendale Federal Bank initiated a number of actions and programs designed to demonstrate the bank's commitment to serving the credit and banking needs of the communities it serves.
 GLENFED Inc., the parent company of Glendale Federal Bank, provides community banking services through 214 bank offices in California, Florida and Washington.
 GLENFED INC. FOURTH QUARTER EARNINGS(a)
 Financial Highlights
 (Dollars in thousands except per-share data)
 (Unaudited)
 Three months ended June 30(b) 1992 1991
 Net interest income before provision
 for loan losses $121,431 $122,920
 Net loss ($25,978) ($136,677)
 Primary loss per share ($.76) ($3.99)
 Fully diluted loss per share ($.76) ($3.99)
 Twelve months ended June 30(b)
 Net interest income before provision
 for loan losses $503,847 $469,050
 Net loss ($120,907) ($230,120)
 Primary loss per share ($3.53) ($6.74)
 Fully diluted loss per share ($3.53) ($6.74)
 At June 30(b)
 Assets $17,899,619 $21,453,710
 Cash, short-term and other
 investment securities 646,747 1,334,590
 Loans and mortgage-backed
 securities, net 15,270,565 18,034,410
 Excess cost over fair value of
 net assets acquired 401,782 419,522
 Deposits 13,720,874 15,864,815
 Borrowings 3,190,035 4,433,746
 Stockholders' equity 703,514 824,405
 Book value per common share 20.58 24.09
 Shares outstanding 34,180,801 34,226,301
 LOAN VOLUME
 1992 1991
 For the Three Months Ended June 30:
 Loans Originated $643,144 $1,045,633
 Loans Purchased $8,363 $25,611
 Mortgage-Backed Securities Purchased $77,990 ---
 Loans and Mortgage-Backed Securities
 Sold $748,059 $194,447
 For the 12 Months ended June 30:
 Loans Originated $2,755,009 $4,565,510
 Loans Purchased $91,034 $55,946
 Mortgage-Backed Securities
 Purchased $3,271,592 $131,365
 Loans and Mortgage-Backed
 Securities Sold $4,923,492 $2,501,590
 Average Interest Rates at June 30:
 Yield on Loan Portfolio 8.11 pct 9.94 pct
 Yield on Investment Portfolio 5.42 pct 6.55 pct
 Yield on Earning Assets 8.03 pct 9.75 pct
 Cost of Customer Deposits 4.78 pct 6.56 pct
 Cost of Borrowings 6.16 pct 7.53 pct
 Cost of Money 5.04 pct 6.77 pct
 Earnings Spread 2.99 pct 2.98 pct
 Non-Performing and Restructured Assets
 Consolidated:
 Non-Accrual Loans $472,535 $419,452
 REO and Other Assets 281,839 195,704
 Total Non-Performing Assets 754,374 615,156
 Restructured Loans 72,758 96,920
 Total Non-Performing Assets and
 Restructured Loans $827,132 $712,076
 Glendale Federal Bank:
 Non-Accrual Loans $407,897 $285,868
 REO and Other Assets 257,915 147,656
 Total Non-Performing Assets 665,812 433,524
 Restructured Loans 72,758 86,856
 Total Non-Performing Assets and
 Restructured Loans $738,570 $520,380
 1992 1991
 Non-Performing and Restructured
 Asset Ratios(c) Consolidated:
 Non-Accrual Loans 2.64 pct 1.96 pct
 REO and Other Assets 1.57 pct 0.91 pct
 Total Non-Performing Assets 4.21 pct 2.87 pct
 Restructured Loans 0.41 pct 0.45 pct
 Total Non-Performing Assets and
 Restructured Loans 4.62 pct 3.32 pct
 Glendale Federal Bank:
 Non-Accrual Loans 2.33 pct 1.38 pct
 REO and Other Assets 1.47 pct 0.72 pct
 Total Non-Performing Assets 3.80 pct 2.10 pct
 Restructured Loans 0.42 pct 0.42 pct
 Total Non-Performing Assets and
 Restructured Loans 4.22 pct 2.52 pct
 Glendale Federal
 Capital Ratios at June 30, 1992 Federal Bank Requirement
 Tangible capital 2.02 pct 1.50 pct
 Core capital 3.06 pct 3.00 pct
 Risk-based capital 6.85 pct 7.20 pct
 (a) GLENFED Inc.'s fiscal year ends June 30.
 (b) In the third quarter of fiscal 1992, the company implemented Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). The Consolidated Statement of Operations for the three and 12 months ended June 30, 1991 and the excess cost over fair value of net assets acquired and stockholders' equity at June 30, 1991 reflect this change.
 (c) As a percentage of total assets.
 GLENFED INC. FOURTH QUARTER EARNINGS
 Consolidated Statement of Operations(a)
 (Dollars in Thousands)
 (Unaudited)
 Three Months Ended 12 Months Ended
 June 30 June 30,
 1992 1991 1992 1991
 Interest income:
 Loans $291,648 $421,812 $1,377,009 $1,815,441
 Mortgage-backed
 securities 49,534 35,796 190,798 153,146
 Investments 12,374 24,914 73,957 141,236
 Total interest
 income 353,556 482,522 1,641,764 2,109,823
 Interest expense:
 Deposits 175,861 276,253 864,403 1,206,789
 Short-term
 borrowings 14,845 6,941 56,850 88,913
 Other borrowings 41,419 76,618 216,664 354,312
 Interest
 capitalized --- (210) --- (9,241)
 Total interest
 expense 232,125 359,602 1,137,917 1,640,773
 Net interest
 income 121,431 122,920 503,847 469,050
 Provision for
 loan losses 78,676 146,916 314,437 336,211
 Net interest
 income (loss) after
 provision for
 loan losses 42,755 (23,996) 189,410 132,839
 Non-interest income:
 Title insurance
 fees(b) --- --- --- 29,224
 Loan servicing
 income (2,543) 3,769 15,690 41,582
 Other fees & service
 charges(b) 12,314 15,531 51,563 74,423
 Gain on sale
 of loans, net 11,472 296 29,418 1,916
 Gain (loss) on sale
 of mortgage-backed
 securities, net (4,515) (2,256) 78,877 12,849
 Unrealized gain
 (loss) on valuation
 of mortgage-backed
 securities held for
 sale 42,493 --- (12,016) ---
 Loss on sale of
 investments, net --- --- (524) (182)
 Operations of real
 estate held for
 sale or investment (32,500) (89,494) (105,689) (128,522)
 Operations of real
 estate acquired in
 settlement of loans (17,182) (20,705) (55,967) (67,863)
 Other operating
 income (expense),
 net (88) (11,793) (9,541) (23,474)
 Total non-interest
 income (expense) 9,451 (104,652) (8,189) (60,047)
 Non-interest expense:
 Compensation &
 employee benefits 33,621 41,931 125,674 213,413
 Occupancy expense,
 net 10,392 11,346 41,402 49,805
 Regulatory insurance 9,481 9,674 38,300 38,337
 Other general and
 administrative
 expense 23,523 28,528 85,830 125,709
 Amortization of
 excess cost over
 fair value of
 net assets acquired 4,279 5,895 17,131 19,482
 Total non-interest
 expense 81,296 97,374 308,337 446,746
 Loss before income
 tax benefit (29,090) (226,022) (127,116) (373,954)
 Income tax benefit (3,112) (89,345) (6,209) (143,834)
 Net loss ($25,978) ($136,677) ($120,907) ($230,120>
 (a) In the third quarter of fiscal 1992, the company implemented SFAS 109, effective July 1, 1991. The Consolidated Statement of Operations for the three and 12 months ended June 30, 1991 reflects this change.
 (b) The company's title insurance subsidiary, North American Title Co., was sold on March 29, 1991. Fee income for the 12 months ended June 30, 1991 from this subsidiary was $46.2 million.
 -0- 7/31/92
 /CONTACT: Judy Cunningham, 818-500-2274, or Rosanne O'Brien, 818-500-2824, both of GLENFED/
 (GLN) CO: GLENFED Inc. ST: California IN: FIN SU: ERN


EH-JL -- LA029 -- 5856 07/31/92 22:38 EDT
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