Perpetual Financial Corp., parent of the area's largest savings and loan, said yesterday that it expects to report a $31 million loss for the three months ended Sept. 30 because of the continuing deterioration in the area's commercial real estate market.

Perpetual said it expects nonperforming loans, those that are not earning interest, to total $401 million as of Sept. 30., an increase of $66.7 million compared with July 31. Because of the increase in problem loans, Perpetual added $35 million to its loan loss reserves, the cushion that protects against possible loan defaults.

The company said the reserve addition, which cuts directly into the bottom line, along with a $15 million loss on real estate investments over the three months, was to blame for the expected $31 million loss.

The holding company of Vienna-based Perpetual Savings Bank was scheduled to report its year-end financial results today, but the board of directors voted to change the fiscal year for the company to end Dec. 31 to "better align itself with other financial institutions."

Because of the change, Perpetual yesterday reported "interim" anticipated losses for the three months ended Sept. 30 and said it would report final results sometime in January.

Perpetual spokesman Robert A. Barton Jr. said the change was not an effort to delay reporting year-end figures, but rather "an adjustment that has been needed for quite some time."

Barton said that since 1881, Perpetual has reported results to shareholders on a fiscal year ended Oct. 31. However, regulators require the reporting of results on a calendar year. Barton said the change will allow Perpetual to report to regulators and shareholders at the same time.

Perpetual already had reported total losses of $68.5 million for the nine months ended July 31. But because that nine-month period overlaps the interim report, it's unclear where total losses stand now or how they compare with last year's performance. Barton said the company did not have time to refigure the results but would do so in the coming weeks.

It is clear, however, that the company's financial downturn has eaten away at Perpetual Savings Bank's capital, the cash that regulators require thrifts to have on hand to protect the federal deposit insurance fund from losses.

Barton said Perpetual Financial Corp. has provided its subsidiary with $14.5 million in cash so that the thrift could meet federal capital requirements. In a statement, the company said that "subsequent compliance with capital ratios may be prevented by additional loan loss provision requirements resulting from the weakening real estate climate." The company has warned previously that it is in danger of failing to meet capital requirements.

Barton said the parent firm has another $11.5 million to contribute to Perpetual Savings Bank's capital position if necessary. Perpetual made its announcement after the stock market closed yesterday. The company's stock closed at 75 cents in over-the-counter trading, up 12.5 cents.