S&Ls;’ Dab of Red Ink Follows 2 Earlier Profits

Feeling the effects of the recession, Orange County’s savings and loans reported an aggregate loss of $3.8 million for the third quarter of 1991.

The red ink comes after the 23 county-based thrifts posted two consecutive quarterly profits during the first six months last year, a feat the local S&L; industry hadn’t achieved in nearly a decade.

The small loss, however, barely affected the bottom line for the first nine months, which amounted to net income of $76.3 million for the same thrifts. Last July, two failed thrifts, Malibu Savings Bank in Costa Mesa and Beach Savings Bank in Fountain Valley, were sold.

In 1990, the county S&Ls; that existed then produced combined net income of $3.7 million for the third quarter and an aggregate loss of $322.7 million for the nine-month

period.

Profits at the county’s two biggest earners--American Savings Bank in Irvine and Household Bank in Newport Beach--were just about nullified by red ink at the county’s two biggest money losers--FarWest Savings & Loan in Newport Beach and Guardian Savings & Loan in Huntington Beach. Both FarWest and Guardian were seized last year by regulators, who continue to operate the thrifts.

Total assets at the thrifts fell 6.1%, one of the bigger drops in recent years. Only seven thrifts grew in size. Most reduced assets either to bolster their capital ratios and stave off losses or to respond to lower demand for deposit accounts as customers looked elsewhere for higher interest rates for their money.

Orange County S & L Scoreboard

Third quarter, 1991, results:

Ranked by assets ASSETS CAPITAL ADEQUACY (millions) % % % Risk- S&L; 1991 1990 Tangible Core based American $17,073.0 $17,349.8 4.2 4.2 13.1 Household Bank 8,655.4 7,655.9 3.2 4.0 10.0 New West Federal 1 6,785.1 8,110.4 0.0 0.0 0.0 Downey 3,874.6 4,036.4 5.2 5.2 10.6 Western Financial 2,667.1 3,097.4 4.7 4.7 11.1 FarWest 2 2,299.8 3,828.1 -10.7 -10.7 -9.2 Union Federal 2,010.6 2,456.7 2.4 2.7 5.0 ITT Federal 1,315.4 1,142.2 5.7 5.7 8.4 Beverly Hills 1,210.1 1,456.8 9.3 9.3 43.7 Long Beach 801.4 812.8 3.1 3.1 4.6 Guardian 2 638.6 606.3 -1.5 -1.5 -2.0 United California 609.3 643.2 3.3 3.3 7.2 Fullerton 335.6 348.1 6.8 6.8 9.8 Standard Pacific 292.8 265.1 6.7 6.7 13.5 Universal 261.7 288.2 3.2 4.0 8.9 San Clemente 238.4 264.3 1.5 2.0 2.7 Plaza 196.6 101.3 7.1 7.1 12.0 Irvine City 101.8 96.1 4.0 4.0 9.5 Sterling 73.9 122.0 17.0 17.0 19.9 Delta 2 63.1 68.0 5.2 5.2 8.4 Cornerstone 58.3 61.3 3.8 3.8 5.4 University 55.9 73.5 4.0 4.0 7.9 Pioneer 51.2 25.8 13.3 13.3 32.8 Orange County Totals 49,669.7 909.7 1.3% 3.1% 8.2% At the end of September, federal regulations required thrifts to have capital ratios of 1.5 tangible, 3 core and 7.2 risk-based.

1Self-liquidating S&L; consisting of old American Savings & Loan’s bad assets.

2Seized and operated by regulators.

Source: Office of Thrift Supervision Ranked by assets NET INCOME (thousands) S&L; 1991 1990 American $48,324 $62,266 Household Bank 15,379 12,052 New West Federal 1 0 0 Downey -9,587 3,692 Western Financial 5,040 2,458 FarWest 2 -34,430 -89,526 Union Federal -6,536 921 ITT Federal 4,530 1,107 Beverly Hills 2,043 4,807 Long Beach 3,740 2,626 Guardian 2 -26,602 1,533 United California -4,909 -550 Fullerton 609 517 Standard Pacific 1,036 395 Universal -47 -129 San Clemente -3,284 242 Plaza 951 551 Irvine City 84 -71 Sterling -54 697 Delta 2 -195 116 Cornerstone 2 2 University -51 30 Pioneer 113 5 Orange County Totals -3,844 3,741 At the end of September, federal regulations required thrifts to have capital ratios of 1.5 tangible, 3 core and 7.2 risk-based.

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

2 Seized and operated by regulators.

Source: Office of Thrift Supervision