Nov 13 (Reuters) - B. Riley Financial ( RILY ) on

Wednesday warned of a third-quarter loss and said it would delay

its earnings report due to hold-ups in finalizing the valuations

of some loans and investments.

The California-based bank has been in a turmoil since August

when it suspended its dividend and warned of a markdown from its

investment in Vitamin Shoppe-parent Franchise Group.

The bank expects net loss from continuing operations to be

between $130 million and $135 million, or $4.26 to $4.43 per

share, mainly due to a nearly $120 million decline in the

valuation of its investment in the retailer.

Earlier this month, Franchise Group filed for bankruptcy,

prompting B. Riley to warn of a bigger hit from its ill-fated

investment.

Including discontinued operations, it expects to post a loss

of about $290 million to $300 million or $8.85 to $9.18 per

share.

B. Riley, whose shares have slumped 77% this year, said it

was "working diligently" to file the September quarter report.

It is also yet to file the report for the three months ended

June 30.

The bank said its debt is expected to be about $2.06 billion

at the end of September, a decrease of $100 million from June

end. It repaid about $82 million to Japanese investment bank

Nomura in the quarter.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Arun

Koyyur)