Net Income Up 25% : Far West Financial Reports Record Year

Far West Financial Corp., the Newport Beach holding company for Far West Savings & Loan Assn., posted a record year in 1985 for net income, revenues, total assets and total deposits, Alexander L. Popof, senior vice president, said Wednesday.

Lower interest rates, lower operating costs and a larger number of loans helped the corporation wind up the year with net income of $16 million, a 25% increase over the previous year’s net income of $12.8 million. Revenue reached $287.4 million, a 20% rise over the $238.8 million in revenue the previous year.

Popof had said three months ago that the company’s financial results were outpacing the previous year’s statistics, even though 75% of the company’s earnings in 1984 resulted from the sale of its shares in Gulf Corp.

Meantime, Far West stock gained 75 cents a share Wednesday to close at $55.25, a 52-week high on the New York Stock Exchange.

“We hope 1986 will be as good to us as 1985,” Popof said. “We don’t make predictions, but we certainly don’t see the economy turning against us.”

$2.4 Billion in Assets

The company’s assets at the end of the year were $2.4 billion, a 20% increase over $2 billion the previous year. Total deposits rose 30% to $1.7 billion from $1.3 billion, and total loans rose 20% to $1.65 billion from $1.37 billion.

In the fourth quarter ended Dec. 31, the company posted earnings of $4.3 million, more than 2 1/2 times the $1.7 million earned in the quarter a year earlier. Total revenues in the quarter rose 21% to $79.7 million from $65.5 million.

Popof said the lower interest rates provided a greater spread--and more profits--between the company’s earnings on loans and investments and the amount it paid on deposits and borrowings.

Nearly all the earnings were attributed to the company’s S&L;, he said.

The S&L;’s net worth was 5.8% of assets. The Federal Home Loan Bank Board, the regulatory agency that looks to net worth as a measure of an S&L;’s soundness, usually requires a minimum net worth of 3%.

In 1983, Far West’s majority owners, the Belzberg brothers of Canada, teamed with T. Boone Pickens, chairman of Mesa Petroleum Corp, to try to gain control of Gulf.

The group failed to win a proxy battle with Gulf’s management. But when Gulf was subsequently acquired by Standard Oil Co. of California, the price of Gulf’s common shares shot up and Far West sold its holdings in early 1984 for $16.8 million, realizing a profit of more than $8.4 million.