Ailing Valley Federal’s Earnings Drop 64% in ’91

Valley Federal Savings and Loan Assn., an ailing Van Nuys thrift that has been put up for auction by the federal Office of Thrift Supervision, said its fiscal 1991 earnings dropped 64% to $9.35 million from $25.7 million a year earlier.

For the three months ended Dec. 31, Valley Federal’s profit plunged 76% to $1 million from $4.24 million in the fourth quarter of 1990. Assets as of Dec. 31 declined 16% to $2.2 billion from $2.7 billion a year earlier.

The 1991 results include a non-recurring pre-tax gain of $8 million from the recovery of Los Angeles city business license taxes, Valley Federal said. Also included is a gain of $8.2 million from the recovery of mobile home asset receivables, the thrift said. But that was offset by a provision for branch closure costs of $3.3 million and general loan-loss provisions of $14.4 million.

The thrift’s ratio of non-performing real estate loans and foreclosed properties as a percentage of total loans rose to 4.6% from 1.7% a year earlier.

Despite progress in shoring up its capital, Valley Federal was still $132 million short of federal minimum requirements as of Dec. 31, the thrift said. In November, the OTS placed Valley Federal in its accelerated resolution program in an effort to find a buyer for the thrift.