Far West Financial said it must add...

Far West Financial said it must add up to $32 million to its loan loss reserves, which would reduce its previously reported net income for last year by up to 79.3% and put its fourth-quarter results in the red by as much as $16.1 million. Far West, the holding company for Far West Savings & Loan, said new appraisals and other recent information on properties in energy-producing states have caused the company and its independent accountants to question the ability of the properties or loans on the properties to pay off. The company said it will add $28 million to $32 million to its reserves against possible future loan losses once the accounting review is complete. Such reserves can only come out of earnings or capital. Based on additional reserves of $32 million, the previously announced annual net income of $21.8 million would be cut to $4.5 million, and fourth-quarter net income of $1.2 million would become a $16.1-million loss. The S&L;’s regulatory capital would be $200.7 million, still well above the amount required by regulators.