Mercury Savings & Loan Bounces Back in Quarter

Bouncing back from a weak third quarter, Mercury Savings & Loan Assn. of Huntington Beach said Friday that its unaudited fourth-quarter profits totaled $2.25 million, down slightly from $2.6 million in the same period last year.

Annual profits for 1984 were $4.9 million, one of the S&L;’s best years on record but down 54.6% from profits of $10.8 million in 1983, Mercury’s best year ever.

Leonard Shane, Mercury’s chief executive, said in a brief interview Friday that the fourth quarter was marked by increasing earnings from the S&L;’s real estate investments--primarily joint ventures in residential housing development--as well as a lowering of interest rates that increased the spread between the association’s cost of obtaining funds and the yield on its investments.

The same ingredients, combined with a significant reduction in residential mortgage rates and a spurt of home buying made 1983 Mercury’s record year for earnings. But interest rates in 1983 dropped farther than they did in 1984, and the was no major home buying boom last year to further increase Mercury’s earnings.

Still, Shane said last Friday that early signs lead him to believe that Mercury’s 1985 earnings could set a record. “We are seeing a rapid escalation of volume in our joint ventures, and expect to see much more of it in 1985,” he said.

Also included in Mercury’s fourth-quarter report is an extraordinary income item of $701,000, representing the S&L;’s share of the Dec. 31 distribution of preferred stock of the Federal Home Loan Mortgage Corp.

During the fourth quarter, total assets increased to $2.17 billion, a record for the corporation.