Lincoln Loss Drags Down S&L; Figures : Thrifts: The county’s 26 other institutions together earned $104.2 million in the second quarter. But throw in Lincoln and the loss is $59.7 million.

Forget Lincoln Savings & Loan and the local thrift picture begins to look better.

Orange County’s 26 other thrifts together earned $104.2 million in the second quarter. But throw in insolvent Lincoln, the government-run basket case, and the county’s thrifts lost $59.7 million as a group. That’s because Irvine-based Lincoln alone lost $163.9 million.

The number of profitable county thrifts outnumbered the money-losing institutions by nearly 3 to 1. Twenty savings and loans were in the black, while seven reported red figures. Among the profitable S&Ls;, American Savings Bank in Irvine led the way with $68.4 million in net income. Other big earners were Household Bank in Newport Beach with $15.2 million and Downey Savings & Loan in Newport Beach with $10.3 million.

American Savings is the remnant of a failed thrift that was bailed out with government funds in late 1988. It has flourished since, thanks to the government taking charge of its bad assets and tax write-offs given to the new owners.

But there were losers besides Lincoln too. United California Savings Bank in Anaheim lost $5.1 million and Newport Beach-based FarWest Savings, which has been hurt by the writedown of junk bonds and bad loans, lost $3.6 million.

One thrift, University Savings Bank, slipped into insolvency under two of the three strict federal tests for capital. The thrift, which moved its headquarters to Newport Beach barely a year ago, recently returned to its native Fresno.

For the first six months of 1990, county thrifts posted a combined loss of $207 million. But again Lincoln was the major culprit, losing $297 million in the first half of the year. Without Lincoln, the other 26 thrifts earned $90 million in the first two quarters.

A year ago, all county thrifts, excluding Lincoln, earned $82 million. Lincoln, however, took a big hit--recording a $788-million loss for the period as federal regulators forced a writedown of its assets and loans. Regulators seized the thrift in April, 1989.

The brightest hope for county thrifts is that Lincoln and Charter Savings Bank in Newport Beach are now the only county S&Ls; in the hands of regulators. Regulators have sold the main operations of two other government-run thrifts--Mercury Savings & Loan in Huntington Beach and Western Empire Savings & Loan in Irvine--since the end of June.

In the past five years, regulators have routinely been in control of at least four county thrifts every quarter. Orange County, once home to 38 S&Ls;, has become the state’s thrift graveyard with the failure of 19 shops over the years.

Healthy county thrifts, as their counterparts elsewhere, are slowly picking their way through the rubble of the S&L; debacle, which nationwide is expected to cost U.S. taxpayers more than $500 billion over the next 30 years.

But even thrifts that have solid capital--their last bastion against losses--are showing signs of struggling with the economy.

Real estate, even in California, has slowed, and industry experts say that will mean thrifts will have to allocate more money for reserves against possible losses. That means lower income for many and losses for others.

Thrifts are also under a mandate to improve their ratio of capital to assets, but they have found it tough to raise the needed cash. To improve their ratios quickly, they often cut assets, and 17 county thrifts reduced their loan and investment portfolios since June, 1989. Overall, county S&L; assets fell 21% over the last year.

* RELATED STORY: D1

ORANGE COUNTY S&L; SCOREBOARD Second quarter, 1990, results Ranked by assets

ASSETS TOTAL CAPITAL NET (millions) % Tangible % Core % Risk 2nd Qtr Bank (thou American $16,448.1 3.5% 3.6% 14.0% $68,428 New West Federal(a) 8,343.9 0.0% 0.0% 0.0% 0 Household Bank 7,375.8 3.3% 4.2% 8.2% 15,229 FarWest 3,938.1 1.0% 1.1% 2.6% (3,642) Downey 4,027.2 4.7% 4.7% 9.8% 10,292 Western Financial 2,987.9 4.2% 4.2% 8.6% 5,288 Lincoln(b) 2,622.2 -97.8% -97.8% -126.3% (163,898) Mercury(b) 1,737.8 -4.8% -4.8% -5.8% (1,965) Beverly Hills 1,464.7 6.5% 6.5% 226.2% 4,498 ITT Federal 1,110.1 5.3% 5.3% 8.0% 2,244 United California 640.6 3.7% 3.7% 6.6% (5,093) Guardian 624.1 3.3% 3.3% 3.6% 5,705 Fullerton 347.4 4.4% 4.4% 6.9% 1,008 Charter(b) 259.4 0.0% 0.0% 0.0% (161) San Clemente 276.0 4.3% 4.7% 5.8% (111) Universal 294.6 4.2% 4.2% 8.9% 105 Standard Pacific 240.4 6.8% 6.8% 11.0% 233 Western Empire(b) 219.0 -8.3% -8.3% -10.1% 726 Malibu 161.4 2.1% 3.3% 4.8% 339 Sterling 146.0 13.5% 13.5% 16.5% 469 Beach 101.9 4.3% 5.2% 8.7% 46 University 75.7 -0.3% -0.3% 0.3% (10) Irvine City 76.8 5.2% 5.2% 10.7% 87 Plaza 80.2 4.5% 4.5% 8.6% 314 Delta 64.6 3.6% 4.3% 7.2% 102 Cornerstone 60.7 5.8% 5.8% 7.8% 2 Pioneer 23.1 13.3% 13.3% 29.9% 66 Orange County Totals 53,747.7 -2.9% -2.8% -15.7% (59,699)

INCOME 1st Qtr Bank sands) American $43,961 New West Federal(a) 0 Household Bank 5,880 FarWest (25,805) Downey 13,156 Western Financial 2,669 Lincoln(b) (133,365) Mercury(b) (52,969) Beverly Hills 2,165 ITT Federal 3,059 United California (550) Guardian (4,846) Fullerton 517 Charter(b) (718) San Clemente 348 Universal 49 Standard Pacific 151 Western Empire(b) (2,627) Malibu (614) Sterling 1,396 Beach 428 University 21 Irvine City 15 Plaza 605 Delta 116 Cornerstone (46) Pioneer (58) Orange County Totals (147,062)

(a) Self-liquidating S&L; consisting of old American Savings & Loan’s bad assets. (b) Seized and operated by regulators, who recently sold Western Empire and most of Mercury. Source: The Federal Home Loan Bank of San Francisco