SAN DIEGO — Amid growing deterioration of its loan portfolio, HomeFed Bank on Thursday reported a $173.9-million loss for its first quarter, a setback that casts further doubt on the savings and loan's chances of survival.
The loss also brought the 210-branch, San Diego-based S&L out of compliance with one of three minimum capital standards applied by regulators, a shortfall that probably will lead to the S&L being slapped with operating restrictions.
HomeFed, which with $18 billion in assets is the nation's fifth-largest S&L, also said it will soon be short of a second capital benchmark. The loss, which contrasts with a $34.5-million profit in the first quarter last year, follows a $247.5-million net loss in 1990 caused by the setting aside of $546 million for possible loan losses.
A loss and capital shortfall was expected after HomeFed announced last week that it would set aside $200 million more for troubled loans in the first quarter. The provision reflects the results of a recently completed audit of HomeFed's books by federal regulators.
Although expecting the loss, analysts expressed concern about the growing volume of HomeFed's problem loans. Nonperforming assets--loans either in foreclosure on delinquent 90 days or more--rose by nearly $300 million over the quarter to $1.47 billion as of March 31, or 8.4% of assets.