S&Ls; in County Post $92-Million 1st Quarter Loss : Thrifts: The continued flow of red ink from failed Lincoln contributed most of the aggregate loss of 28 institutions.

Orange County’s savings and loans posted a combined $92 million loss for the first quarter, the majority of it from the massive amount of red ink that continues to flow from the failed Lincoln Savings & Loan in Irvine.

The aggregate quarterly loss posted by 28 thrifts based in the county is expected to grow even larger once regulators release figures for three other failed institutions: Western Empire Savings in Yorba Linda and Mercury Savings and Huntington Savings, both in Huntington Beach. Huntington was sold in June to American Savings Bank.

The loss contrasts with $37.8 million in net income posted by the 28 thrifts in last year’s first quarter. With results from the other three thrifts, last year’s combined income was $36.4 million.

The big loser again was Lincoln Savings, which lost $133 million in the first quarter. About half that loss was attributed to new appraisals that lowered the value of the thrift’s Arizona land holdings and loans, a regulatory spokesman said.

Already predicted by regulators to be one of the nation’s costliest cleanups, Lincoln has a huge negative net worth--nearly $1.7 billion more in liabilities than it has in assets.

The widespread problems experienced by thrifts nationwide have prompted a massive restructuring of the industry. Some have even changed their names to distance themselves from the problems.

“I would have to believe some people would think the words ‘savings and loan’ would be pejorative,” said Fredric J. Forster, president of ITT Federal Bank in Irvine, the new name for Newport Balboa Savings. His thrift changed its name also to identify itself more closely with its parent, ITT Financial Corp., a subsidiary of ITT Corp.

And Irvine City Savings became Irvine City Bank primarily to avoid confusion when people referred to Lincoln Savings as an “Irvine S&L;,” said James Giraldin, the institution’s president.

Despite the sour news, many county thrifts showed strong results for the quarter. Others simply were reacting to tough standards for capital--their last reserve against losses--imposed by last year’s federal law that restructured the industry.

* New West Federal, the self-liquidating thrift set up by regulators to dispose of the bad assets from the failed American Savings & Loan, has shed $14 billion of its $22 billion in assets, leaving it with $8.9 billion more to liquidate.

* Bucking the trend toward downsizing, Household added nearly $2.3 billion in assets, ITT Federal took on $360 million and 11 other S&Ls; also grew. Aside from New West’s expected drop, the overall change was a slight increase in assets at county thrifts.

* There were 17 profitable S&Ls;, led by American Savings Bank in Irvine with $44 million in net income and Downey Savings in Newport Beach with $13.2 million in earnings.

* Of the 11 money-losing S&Ls;, only three posted losses greater than $1 million. Besides Lincoln, with a $133-million loss, FarWest in Newport Beach posted a $25.8-million loss and Guardian Savings in Huntington Beach reported a $4.8-million loss.

A number of institutions, such as Sterling Savings in Irvine, have been driven by real estate development and other equity stakes they took. The year-old federal law now requires those direct investments to be off thrift books within five years.

“When I realized in April, 1989, that something was going to happen with direct investments that was not to our liking, we decided to downsize and look for alternatives,” said Robert K. Parker, Sterling’s president.

It has been negotiating for a year with the same proposed purchaser, as it lowered its asset size by $35 million to prepare for the sale.

“I hope to announce something within a month, but I have to tell you I’ve made that same statement before,” Parker said. He would not reveal the identities of the purchasers.

Sterling far exceeds federal capital requirements.

Capital is also no problem for ITT Federal, which picked up $16.3 million in capital contributions last year from its parent firm. It also earned $6.5 million last year, and that was put into the thrift’s capital base.

The S&L;, which has grown since the end of the first quarter to about $1.1 billion in assets, is on a five-year plan to become a $2.5-billion institution, Forster said.

ORANGE COUNTY S&L; SCOREBOARD

First quarter, 1990, results. Capital ratios required by law are 1.5% tangible, 3% core, 6.4% risk-based.

Ranked by assets ASSETS TOTAL CAPITAL NET INCOME (millions) (ratio/assets) (thousands) Savings & Loan 1990 Tangible Core Risk 1990 1989 American 16,030.9 3.3% 3.3% 13.2% 43,961 42,418 New West Federal (a) 8,880.0 0.0% 0.0% 0.0% 0 0 Household Bank 7,217.2 3.1% 4.1% 8.0% 5,880 -725 FarWest 4,166.1 1.0% 1.2% 2.8% -25,805 5,867 Downey 4,049.8 4.9% 4.9% 10.1% 13,156 21,007 Western Financial 2,899.0 4.2% 4.2% 9.0% 2,669 3,087 Lincoln (b) 2,767.3 NA NA NA -133,365 -28,790 Beverly Hills 1,501.0 6.0% 6.0% 202.3% 2,165 1,341 ITT Federal (d) 981.8 5.8% 5.8% 8.7% 3,059 826 United California 643.2 4.0% 4.0% 6.8% -550 9 Guardian 615.9 2.4% 2.4% 2.1% -4,846 2,300 Pacific (c) 605.6 2.9% 3.6% 7.9% -334 -11,465 Fullerton 351.4 6.3% 6.3% 9.5% 517 640 Charter (b) 313.9 -2.5% -1.0% -0.9% -718 -20 San Clemente 301.6 4.0% 4.3% 5.5% 348 -251 Universal 258.4 4.7% 4.7% 9.6% 49 867 Standard Pacific 237.4 6.7% 6.8% 11.4% 151 -106 Malibu 168.1 1.8% 3.0% 4.3% -614 77 Sterling 162.3 12.7% 13.2% 13.6% 1,396 1,217 Beach 99.2 3.8% 3.9% 7.3% 428 148 University 78.6 3.7% 3.7% 5.2% 21 121 Irvine City 78.5 5.0% 5.0% 10.3% 15 -25 Plaza 73.1 4.8% 4.8% 8.6% 605 -68 Security Federal (c) 65.2 -7.5% -7.5% -13.1% -68 247 Delta 59.2 3.1% 3.9% 6.2% 116 -169 Cornerstone 57.4 6.1% 6.1% 8.2% -46 -95 Pioneer 22.1 13.3% 13.3% 32.8% -58 -111 American Interstate (c) 19.5 -11.3% -11.3% -13.0% -328 -529 Mercury (b) NA NA NA NA NA -768 Western Empire (b) NA NA NA NA NA -709 Huntington (c) NA NA NA NA NA 89 Orange County Totals 52,703.7 2.8% 3.0% 8.5% -92,196 36,430

(a) Self-liquidating S&L; consisting of old American Savings & Loan’s bad assets.

(b) Seized and operated by regulators.

(c) Seized by regulators and sold or closed.

(d) Changed name from Newport Balboa Savings.

Source: Office of Thrift Supervision