Huntington Pacific Thrift Reports Rise in Net Income

Citing the lower cost of funds and increased lending authority, Huntington Pacific Thrift & Loan Assn. in Huntington Beach posted net income of $203,626 in the first quarter, a five-fold increase over $40,837 earned in last year’s first quarter.

The unaudited quarterly report continues the trend established last year. According to the audited year-end results just released, net income jumped fivefold in 1985 to $335,000, from $70,593 in the previous year.

Huntington Pacific’s 1984 figures are slightly deceptive, said James A. Rust, the thrift’s president and chief executive, because it acquired a newly opened Hermosa Beach thrift, paid off losses incurred in the opening and received tax credits and more than $500,000 in additional capital. Rust said his thrift, without the merger costs, would have had a $250,000 profit in 1984.

Last year the thrift qualified for deposit insurance through the Federal Deposit Insurance Corp. The switch, from an industry insurance operation, lowered Huntington Pacific’s cost of funds about 25%, thus increasing its profit margin and earnings, Rust said.

In addition, he said, the 4-year-old thrift was allowed under state law to begin lending 12 times its capital, up from eight times its capital base. The law sets a graduated lending authority for thrifts in the first five years of existence.

That increased leveraging ability and the lower cost of funds were the main reasons for Huntington Pacific’s dramatic improvement, Rust said.

The thrift’s assets as of March 30 were $25.8 million, a 59% hike over the $16.2 million asset figure a year earlier. Its capital base increased 24% to $2.6 million from $2.1 million.

Total deposits in the first quarter increased 65% to $23.3 million from $14.1 million a year earlier. Total loans jumped 35% to $23.8 million from $17.6 million.