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VALLEY FEDERAL REPORTS 1991 EARNINGS

 VALLEY FEDERAL REPORTS 1991 EARNINGS
 VAN NUYS, Calif., Jan. 24 /PRNewswire/ -- Valley Federal Savings


and Loan Association (NASDAQ: VFEDC) today reported net earnings of $9.3 million, or $1.63 per share, for the year ended Dec. 31, 1991. For the year ended Dec. 31, 1990, Valley Federal reported net earnings of $25.7 million, or $4.17 per share.
 For the three months ended Dec. 31, 1991, Valley Federal reported net earnings of $1.0 million, or $.19 per share, compared with $4.2 million, or $.66 per share, for the fourth quarter of 1990.
 President and Chief Executive Officer Scott A. Braly, said the 1991 year-end results include pre-tax operating earnings before non- recurring items of $11.2 million. For the corresponding 1990 period, pretax operating earnings before non-recurring items were $14.7 million. Average total assets declined by 13.2 percent during 1991, as compared with 1990.
 The 1991 results include a non-recurring pre-tax gain of $8.0 million from the recovery of Los Angeles city business license taxes. Also included is a gain of $8.2 million from the recovery of mobile home asset receivables, offset by a provision for branch closure costs of $3.3 million and general loan loss provisions of $14.4 million.
 The year-end results for 1990 included pre-tax gains of $4.5 million from the sale of nine savings branches, which were largely offset by costs of $4.0 million associated with several savings branch consolidations. For 1990, results also included net gains of $9.1 million from the sales of real estate loans, securities, loan servicing rights and joint venture properties and $3.9 million from the recovery of mobile home asset receivables.
 At Dec. 31, 1991, non-performing real estate loans and foreclosed properties were $103 million, up from $45 million at Dec. 31, 1990. Non-performing real estate loans and foreclosed properties represented 4.6 percent and 1.7 percent respectively, of total assets at Dec. 31, 1991, and Dec. 31, 1990.
 Valley Federal's shareholders' equity was $3.4 million at Dec. 31, 1991. Though substantially improved from a negative shareholders' equity of $31.4 million at Dec. 31, 1989, Valley Federal still required an additional $132 million of total capital to comply with current regulatory minimums at Dec. 31, 1991. At Dec. 31, 1989, Valley Federal needed an additional $263 million of total capital to satisfy its minimum capital requirements.
 Valley Federal was operating under an approved capital plan with the Office of Thrift Supervision (OTS) that allowed Valley Federal to operate without compliance with regulatory capital minimums until Dec. 31, 1991. Valley Federal applied to the OTS for an extension of the capital plan, but the OTS denied the application. Valley Federal is currently in violation of the mandatory capital requirements for savings and loan associations.
 On Nov. 7, 1991, the OTS placed 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 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 $2.2 billion at Dec. 31, 1991, a decline from $2.7 billion at Dec. 31, 1990. At Dec. 31, 1991, Valley Federal maintained liquidity well in excess of regulatory requirements.
 Valley Federal currently operates 23 retail banking offices in California. The company's deposits are insured by the FDIC and backed by the full faith and credit of the U.S. government.
 VALLEY FEDERAL SAVINGS AND LOAN ASSOCIATION
 Consolidated Financial Highlights
 (In thousands, except per share data)
 (Unaudited)
 Three months ended Twelve months ended
 Dec. 31, Dec. 31,
 1991 1990 1991 1990
 Core earnings $2,118 $1,087 $11,227 $14,673
 Other
 activity (1,111) 3,555 (1,676) 12,013
 Income taxes 7 (400) (204) (978)
 Net earnings $1,014 $4,242 $9,347 $25,708
 Earnings per
 share (a) $0.19 $0.66 $1.63 $4.17
 Dec. 31,
 1991 1990
 Total assets $2,225,558 $2,688,133
 Real estate loans
 and mortgage-
 backed
 securities 1,847,270 2,223,973
 Deposits 1,681,385 1,888,023
 FHLB advances and
 borrowings 508,008 777,517
 Stockholders'
 equity (deficit) 3,376 (5,681)
 Yield on loans
 and investments 8.86 pct. 9.97 pct.
 Cost of funds 6.56 pct. 8.20 pct.
 Stated interest
 margin 2.30 pct. 1.77 pct.
 Shares outstanding 5,523 5,873
 (a) Earnings per share for the three- and 12-months ended Dec. 31, 1990, include the effect of preferred stock dividends.
 -0- 1/24/92
 /CONTACT: Scott A. Braly, president and CEO of Valley Federal Savings, 818-904-3755; or Craig A. Parsons or Kim P. Feazle of Rifkind Pondel & Parsons, 310-207-9300, for Valley Federal Savings/
 (VFEDC) CO: Valley Federal Savings & Loan Assoc. ST: California IN: FIN SU: ERN


EH-JL -- LA008 -- 3138 01/24/92 09:01 EST
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