Financial Corp. of America, the California-based parent of the nation's largest savings and loan association, said yesterday that it had 1985 net income of $53.3 million ($1.01 a share), compared with a loss of $590.5 million ($15.53) in 1984.

Although the troubled S&L giant reported a dramatic turnaround in net income, FCA Chairman William J. Popejoy said the results largely were attributable to the sale of high-yielding, fixed-rate assets and not to earnings from ongoing operations.

For example, FCA reported 1985 fourth-quarter net income of $97 million ($2.58), compared with 1984's fourth-quarter loss of $512.1 million ($14.23); but the 1985 profit included a special gain of $287.2 million from the sale of assets.

An FCA spokeswoman said the company had a loss of $65 million from operations in 1985 and a fourth-quarter operating profit of $16 million.

Popejoy said in a telephone interview he is especially pleased that FCA, which faced a run on deposits in 1984, has been able to increase depositor confidence and reduce operating expenses. He said FCA no longer has to pay a premium to attract deposits.

Popejoy joined FCA with the support of the Federal Home Loan Bank Board in August 1984 after Chairman Charles W. Knapp resigned under pressure. Knapp had been criticized for his flamboyant management style and willingness to take risks.

Some of Popejoy's $68.6 million in cost-cutting last year reflected the end of the Knapp era at FCA. The cost cuts included the sale of nine FCA airplanes, 604 cars and several condominiums.

"Our primary challenges for the coming year are to reduce the non-earning assets through real estate sales, and to increase income through improved efficiency of our operation," Popejoy said. "We need to do whatever we can to rebuild our capital and reduce our interest-rate sensitivity. There are plenty of challenges ahead for FCA."

One of Popejoy's initial goals for 1985 was to meet FCA's net-worth requirement of 4 percent. The net-worth requirement is the regulatory amount, determined by formula, of reserves an S&L must keep on hand in relation to its total size. Popejoy said this target was not met and would not be met in the near future.

One of FCA's biggest problems is that it holds a portfolio of long-term fixed-rate loans (assets), while much of its borrowings are short-term and floating-rate. This mismatch in assets and liabilities is dangerous because it exposes the company to financial risk if short-term interest rates rise sharply. Popejoy said one of his goals for 1986 is to continue trying to reduce that mismatch in assets and liabilities.

Popejoy also said yesterday that, although significant legal and accounting issues could make it difficult, he favors dividing FCA into two companies -- one that would hold its significant real estate and construction loans, and another that would keep deposits and resemble a traditional S&L. Popejoy said two separate companies would be able to attract investors more easily than one giant S&L with complex real estate assets on its books.

Popejoy said the company's accountant, Peat, Marwick, Mitchell & Co., has not indicated what, if any, special qualifications will be included in its opinion in FCA's 1985 annual report. FCA said that the problem items on its books, also known as scheduled items, rose from $1.72 billion as of Sept. 30 to $1.74 billion as of Dec. 31. That was about 6.4 percent of FCA's $27.4 billion of total assets.

"Last year we lost $590 million, the largest loss of any S&L in history without failing," Popejoy said. "We lost $6.8 billion in savings. No bank or S&L has lost that much without failing. We survived those two terrible experiences and are still coming back. Our employe morale is really very feisty."

FCA continued its program last year of trying to increase deposit stability by relying more heavily on retail, or individual, depositors rather than institutions. Its American Savings and Loan Association subsidiary, the nation's largest S&L, operates 135 retail branches throughout California. Retail deposits increased from about 63 percent of all deposits at the end of 1984 to 75 percent at the end of 1985. Total deposits decreased by $709.6 million in the fourth quarter and fell by $2.9 billion in 1985, from $20.3 billion to $17.4 billion. FCA originated $2.8 billion in loans last year.

FCA's major emphasis in the fourth quarter was on selling its high-yielding assets, which the company can do profitably in this environment of relatively low interest rates. The company sold $35 million of assets in October, $41 million in November and $94 million in December; the fourth quarter accounted for 42.5 percent of its total 1985 asset sales.

Because of losses on loans and real estate, FCA increased its loss reserves by $156.4 million in the fourth quarter, bringing its 1985 loss reserves to $182.2 million and increasing total reserves to $574.8 million.