H. F. Ahmanson Earnings Plummet 99% in 4th Quarter

The parent of Home Savings of America, the nation’s largest savings and loan, on Thursday reported a scant $475,000 fourth-quarter profit as the softening California economy continued taking its toll on the state’s thrifts.

H. F. Ahmanson said its earnings declined 99% from a $66.9-million profit in the 1989 fourth quarter. The results came as the Los Angeles thrift holding company set aside $41 million for losses on its real estate development operation--which develops office buildings and tract homes in California--and $67.9 million for unspecificed loan losses that may occur in the future.

Separately, CalFed Inc., as expected, said it posted a big loss in the fourth quarter due mostly to real estate-related problems out of state. The $130.5-million loss for CalFed, parent of California Federal Bank, was slightly less than what the firm projected earlier this month.

A year ago, CalFed earned $23.6 million in the fourth quarter. For 1990, CalFed lost $256.9 million, contrasted with a profit of $82.4 million in 1989.

Golden West Financial, the Oakland-based parent of World Savings & Loan, also said Thursday that its fourth-quarter profit rose just 3% to $42 million. A company spokesman said earnings for the thrift, one of the nation’s strongest, were hurt by costs associated with acquisitions, higher fees paid to regulators and higher premiums for deposit insurance. For the year, Golden West’s profit rose 15% to $181.5 million.

In Van Nuys, Valley Federal Savings & Loan, which is operating under the close scrutiny of regulators, said it earned $4.2 million in the fourth quarter, contrasted with a $64.7-million loss a year earlier. The thrift, which earned $25.7 million in 1990 contrasted with a $137.7-million loss a year earlier, added that it is asking regulators to extend a June 30 deadline to meet federal requirements for capital, which is the financial safety net institutions must maintain.

The Ahmanson results are significant because it is regarded as one of the strongest savings and loans in the nation and a bellwether for the industry. Despite the lower earnings, securities analysts said they believe Ahmanson will remain healthy.

“The company is primarily a single-family home finance company. To date, losses on home mortgage portfolios have been exceedingly low,” said Jonathan E. Gray, savings and loan analyst with the investment firm Sanford C. Bernstein in New York.

For all of 1990, Ahmanson’s earnings declined 9.2% to $191 million from $210.3 million in 1989, a decline it attributed to the fourth-quarter boosting of its reserves for loan losses. In addition, earnings were affected by the November acquisition of Home Savings Bank in New York. Ahmanson said that without Home Savings Bank, earnings for the year would have increased 11.5%.

In general, California thrifts have been setting aside more money for potential loan losses in anticipation of tougher examinations by regulators or at the direct request of regulators. Both Ahmanson and Golden West are expected to be examined by regulators of the Office of Thrift Supervision, the primary supervisor of thrifts, within the next few weeks. Great Western Financial, the Beverly Hills parent of Great Western Bank, is being examined by regulators now and is expected to report its fourth-quarter results next week.

THRIFTS

*Fourth quarter 1990 *Fourth quarter 1989 H.F. Ahmanson Home Savings of America $0.475 $66.9 CalFed Inc. -$130.5 $23.6 Golden West Financial (World Savings) $42.1 -$40.9 Valley Federal Savings $4.2 -64.7