Butterfield Equities Loses $8.7 Million in 2nd Period
Butterfield Equities Corp. of Santa Ana reported Friday that it lost $8.7 million in its second fiscal quarter and blamed rapid growth of its savings and loan operations for the losses.
The loss, which compares with a profit of $406,925 in the year-ago quarter, comes six weeks after the company announced a major restructuring. At that time, Butterfield Equities President Donald W. Endresen said the company was putting the brakes on the rapid growth of its Butterfield Savings & Loan Assn. unit.
Butterfield Equities is a diversified financial services corporation that also owns an insurance company, the 32-store chain of Love’s restaurants and franchises for 10 Wendy’s hamburger stores.
In a statement Friday, Endresen said the losses were connected to the S&L;’s push during the first quarter--before the slowdown was implemented--to acquire deposits in the first quarter. In that quarter, the company had reported a $7.1-million loss. “Second-quarter results cannot reflect the effects of current management decisions,” Endresen’s statement said.
Company officials were not available Friday to elaborate on the written statement.
Revenues during the second quarter, ended Dec. 31, rose 63% to $29.6 million from $18.2 million during the second quarter of fiscal 1984.
For the first half of fiscal 1985, Butterfield Equities reported a net loss of $15.7 million, compared with a loss of $1.6 million in the first six months of fiscal 1984. First-half revenues were $57 million, up 120% from the $25.9 million recorded for the same period in the previous year.
In January, when Endresen announced the change in strategy for the S&L;, once considered one of the nation’s most innovative new savings associations, he said it was in response to an expected tightening of federal controls on entrepreneurial S&Ls.;
Butterfield’s restructuring plan included reducing the S&L;’s assets by $200 million, discontinuing certain operations and laying off 30% of its work force. In the previous quarter, the company also sold its Santa Ana headquarters building for $26 million.
