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GLENFED REPORTS FOURTH QUARTER AND FISCAL 1993 RESULTS; NOTES IMPROVING TRENDS IN ASSET QUALITY

 GLENDALE, Calif., July 22 /PRNewswire/ -- GLENFED Inc. (NYSE: GLN), parent company of Glendale Federal Bank, today reported a net loss of $29.9 million, or $0.87 per share, for the fourth fiscal quarter ended June 30, 1993, vs. a net loss of $26.0 million, or $0.76 per share, for the same quarter last year. For the full 1993 fiscal year, GLENFED reported a net loss of $80.8 million, or $2.37 per share, including an extraordinary net gain of $58.3 million, or $1.70 per share, compared to a net loss of $120.9 million, or $3.53 per share, in fiscal 1992. The extraordinary gain included in the results for fiscal 1993 resulted principally from the completion in March 1993 of an exchange offer in which $137 million of subordinated debt of Glendale Federal Bank was exchanged for preferred stock of the bank.
 In the quarter ended June 30, 1993, the company reported a loss before income tax expense and extraordinary items of $30.4 million, compared to losses before income taxes and extraordinary items of $50.4 million and $85.0 million in the quarters ended March 31, 1993 and Dec. 31, 1992, respectively. The loss before income tax expense and extraordinary items for all of fiscal 1993 was $178.5 million, compared to $127.1 million for fiscal 1992.
 Stephen J. Trafton, chairman and chief executive officer, said, "The quarter-to-quarter reduction of our loss before income tax expense and extraordinary items over the last two quarters, we believe, constitutes an early indication of improvement of the asset quality problems that have so severely affected the company's operating results during the recessionary real estate markets we have experienced over the last three fiscal years. As we near completion of the disposition of the assets of our commercial (asset-based) lending and real estate development subsidiaries, and continue to significantly reduce the balances of our portfolios of higher risk loans, which we ceased to originate in 1990 and 1991, we expect to see, absent a significant deterioration in the Southern California real estate markets, further improvements in our asset quality."
 Assets of the commercial (asset-based) lending and real estate development subsidiaries have been reduced from $956.7 million at June 30, 1990, to $161.0 million at June 30, 1993. During this three- year period, losses, before taxes, from these subsidiaries totaled $518.9 million, or 76 percent of the aggregate net loss before income tax and extraordinary items experienced by GLENFED during this period. Trafton added, "At the current levels of these portfolios, and taking into consideration the existing loss allowances associated with these portfolios, we believe GLENFED will not experience any further material loss from the activities of these subsidiaries."
 Total non-performing assets and restructured loans declined to $938.2 million at June 30, 1993, from $970.5 million at March 31, 1993. Non-performing assets and restructured loans reached a peak of $1.02 billion in February, and since then have declined for four consecutive months. The total at June 30, 1992, was $827.1 million. Charge-offs to the allowance for loan losses have declined for two consecutive quarters. Net charge-offs in the fourth quarter totaled $43.2 million, compared to net charge-offs of $52.6 million and $63.9 million in the third and second quarters of fiscal 1993, respectively. Net charge-offs for all of fiscal 1993 were $197.9 million, compared to $308.1 million in fiscal 1992. The decreasing charge-off experience has been primarily because of improvements in loss experience in multifamily residential and non- residential lending and reductions of the company's consumer and commercial (asset-based) loan portfolios.
 The provision for loan losses has declined for two consecutive quarters, totaling $46.1 million in the most recent quarter and $64.2 million and $77.2 million in the third and second fiscal quarters of 1993. The fourth quarter of fiscal 1993 provision of $46.1 million compares to a provision of $78.7 million in the same quarter a year ago. For the full year, the provision for loan losses was $251.3 million in fiscal 1993, compared to $314.4 million for fiscal 1992.
 GLENFED's allowance for loan losses totaled $334.8 million at June 30, 1993, representing a ratio of allowance to non-accrual loans of 68.6 percent and a ratio of allowance to total gross loans of 3.0 percent. At June 30, 1992, the allowance for loan losses totaled $281.4 million and the comparable ratios were 59.6 percent and 2.2 percent, respectively.
 Trafton noted, "Our improving asset quality may be linked to the particular characteristics of our loan portfolios. Approximately 55 percent of the loan portfolio consists of single-family mortgages, and 90 percent of these loans have balances of $203,150 or less. Higher balance single-family loans have experienced much higher delinquency and default rates than the lower balance loans we have traditionally emphasized, particularly in the Southern California real estate markets. Multifamily loans represent about 25 percent of total loans, but again we have participated primarily in the lower end of the apartment market, with the bulk of these loans in the 5-36 unit category, of which about two-thirds have balances of less than $1 million."
 Trafton added, "Similar characteristics are found in the non- residential loan portfolios, which amount to about 18 percent of total loans. For example, our $729 million in loans secured by office buildings includes only $47 million in non-accrual loans and consists mainly of small suburban office buildings. We have no exposure to high- rise, `trophy' office buildings in major downtown areas."
 The significant reduction in the assets of our real estate development subsidiaries has resulted in greatly reduced losses on operations of real estate held for sale or investment (REI). Such losses totaled $3.0 million for the fourth quarter and $31.5 million for the fiscal year ended June 30, 1993, compared with losses of $32.5 million and $105.7 million, respectively, for the fourth quarter and full fiscal year in 1992. Excluding bank premises, real estate investment assets have declined to $25.8 million at June 30, 1993.
 Losses on operations related to real estate acquired in settlement of loans (REO) totaled $9.l million for the fourth quarter and $44.4 million for fiscal 1993, compared to $17.2 million and $56.0 million, respectively, for the same periods a year ago. The reduction in REO losses was primarily because net gains of $3.6 million and $7.4 million recorded on the sale of REO in the current fourth quarter and fiscal 1993, compared to a net gain of $0.3 million and a net loss of $0.4 million, respectively, on the sale of REO for the same periods last year. REO sales totaled $373 million in fiscal 1993 compared to $205 million in fiscal 1992. In addition, provisions for losses on REO totaled $7.3 million and $29.2 million in the fourth quarter and fiscal 1993, respectively, compared to $12.3 million and $40.3 million, respectively, in the same periods last year.
 "Offsetting these emerging favorable developments in asset quality," Trafton added, "We were disappointed by the decrease in our net interest income, resulting principally from declines in the volume of interest earning assets during fiscal 1993 and a narrowing of our net interest spread."
 GLENFED's net interest income (before provision for loan losses) totaled $81.7 million for the quarter and $359.3 million for the fiscal year ended June 30, 1993, vs. $121.4 million and $503.8 million, respectively, for the comparable periods a year ago. The decline in net interest income is primarily attributable to a significant reduction in average interest earning assets, which totaled $16.3 billion for the year ended June 30, 1993, vs. $18.7 billion a year earlier.
 Net interest income also was affected by compression of the bank's interest rate spread during the year, which was 2.31 percent at June 30, 1993, compared with 2.99 percent at June 30, 1992. The reduced interest rate spread is partially attributable to an increase of $1 billion in the balance of the bank's liquidity portfolio, which earns substantially less than the yield of other investments. The interest rate spread has also been adversely affected during the fourth quarter by higher than anticipated prepayments on certain mortgage-backed securities purchased at a premium and the resulting necessity to accelerate amortization of the related purchase premium for the securities to reflect the higher prepayment rates.
 While GLENFED maintained its total assets of $17.9 billion at both June 30, 1992 and 1993, the composition of its assets and liabilities each exhibited a material change during fiscal 1993, because of part to the financial difficulties and resulting publicity of those difficulties during the year. Deposits decreased by $2.1 billion during fiscal 1993, from $13.7 billion at June 30, 1992, to $11.6 billion at June 30, 1993. Disintermediation experienced throughout the thrift industry, resulting from historically low interest rates on deposits, was exacerbated for Glendale Federal Bank by consumer concern regarding the bank's ability to overcome its financial problems. GLENFED was able to replace these deposits with a $2.2 billion increase in borrowings during the year, primarily by means of short-term repurchase agreements. Borrowings at June 30, 1993, totaled $5.4 billion, compared to $3.2 billion at June 30, 1992.
 Low interest rates also led to a continuation during fiscal 1993 of the refinancing boom that resulted in significant repayments and prepayments of mortgage loans and mortgage-backed securities. GLENFED's total loans and mortgage-backed securities declined $537.8 million, from $15.3 billion at June 30, 1992, to $14.7 billion at June 30, 1993. Cash, short-term and other investment securities increased from $646.7 million at June 30, 1992, to $1.6 billion at June 30, 1993. The increase in this portfolio was, in part, necessary to meet the liquidity needs of the bank, but also reflected the difficulty experienced by GLENFED in originating, or finding available for purchase, loans and mortgage-backed securities meeting the company's investment criteria in quantities sufficient to offset the extraordinary prepayments experienced in these portfolios during the year.
 "We are pleased that we have been able to maintain the significantly reduced operating expense levels achieved during fiscal 1992," Trafton stated. Operating expenses (excluding goodwill amortization) for the quarter and fiscal year ended June 30, 1993, totaled $69.5 million and $281.7 million, respectively, down from $77.0 million and $291.2 million, respectively, for the same periods a year ago.
 Glendale Federal Bank is operating under a prompt corrective action (PCA) directive, which was amended in June 1993 by the Office of Thrift Supervision (OTS). The Amended PCA Directive calls for the bank to achieve capital ratios at the Sept. 30, 1993, quarterly measurement date of 4.5 percent core capital
and 9.0 percent risk-based capital. At


June 30, 1993, the bank had capital ratios of 1.87 percent tangible capital, 2.65 percent core capital and 5.77 percent risk-based capital, compared with federal requirements applicable at that date of 1.5 percent, 3.0 percent and 8.0 percent, respectively.
 Concurrently with amending the PCA Directive, the OTS approved the bank's capital restoration plan which contemplates a comprehensive financial restructuring of GLENFED and Glendale Federal Bank. On July 6, 1993, GLENFED and Glendale Federal Bank distributed a proxy statement/offering circular to GLENFED stockholders seeking approval of a Plan of Reorganization, which contemplates a series of transactions that are expected to enable the bank to satisfy the Sept. 30, 1993, capital requirements imposed by the OTS.
 These transactions, which will result in substantial dilution of stockholders' equity, include: a merger of GLENFED into a subsidiary of the bank; an exchange offer for GLENFED's 7.75 percent Convertible Subordinated Debentures due 200l; a solicitation of consents to approve the reclassification of the bank's 12 percent Noncumulative Perpetual Preferred Stock Series B and Series C into a new series of convertible preferred stock of the bank; an underwritten offering of $125 million of an additional new series of convertible preferred stock of the bank; and a $250 million to $300 million rights offering of common stock of the bank, which will be backed by $250 million of standby commitments from institutional and other investors. Glendale Federal Bank has also recently announced a plan to sell 23 of the 60 banking offices it operates in Florida.
 GLENFED INC.
 Fourth Quarter Earnings(a)
 Financial Highlights
 (Dollars in thousands except per share data)
 (Unaudited)
 Three months ended June 30, 1993 1992
 Net Interest Income Before Provision
 for Loan Losses $81,683 $121,431
 Loss Before Extraordinary Items ($29,857) ($25,977)
 Extraordinary Items, net --- ---
 Net Loss ($29,857) ($25,977)
 Loss Per Share:
 Primary
 Loss Before Extraordinary Items ($0.87) ($0.76)
 Net Loss ($0.87) ($0.76)
 Fully Diluted
 Loss Before Extraordinary Items ($0.87) ($0.76)
 Net Loss ($0.87) ($0.76)
 Fiscal Year ended June 30,
 Net Interest Income Before Provision
 for Loan Losses $359,313 $503,847
 Loss Before Extraordinary Items ($139,190) ($120,906)
 Extraordinary Items, net 58,344 ---
 Net Loss ($80,846) ($120,906)
 Loss Per Share:
 Primary
 Loss Before Extraordinary Items ($4.07) ($3.53)
 Net Loss ($2.37) ($3.53)
 Fully Diluted
 Loss Before Extraordinary Items ($4.07) ($3.53)
 Net Loss ($2.37) ($3.53)
 At June 30
 Assets $17,908,833 $17,899,620
 Cash, Short-Term and Other
 Investment Securities 1,584,181 646,747
 Loans and Mortgage-Backed
 Securities, net 14,732,809 15,270,621
 Excess Cost Over Fair Value of
 Net Assets Acquired 385,754 401,782
 Deposits 11,615,529 13,720,874
 Borrowings 5,399,238 3,190,035
 Stockholders' Equity 622,676 703,515
 Book Value Per Common Share 18.23 20.58
 Shares Outstanding 34,152,301 34,180,801
 Loan Volume 1993 1992
 For the Three months Ended June 30:
 Loans Originated $564,910 $643,646
 Loans Purchased 27,886 8,363
 Mortgage-Backed Securities Purchased 667,978 77,990
 Loans and Mortgage-Backed
 Securities Sold 152,545 748,059
 For the Fiscal Year Ended June 30:
 Loans Originated $1,894,847 $2,755,511
 Loans Purchased 111,423 91,034
 Mortgage-Backed Securities Purchased 3,002,959 3,271,592
 Loans and Mortgage-Backed
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Date:Jul 22, 1993
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