5 County Banks Report Hefty Gains in Profit Margins

Five Orange County banks Thursday reported hefty profit increases for the second quarter and first six months of the year, indicating that the industry may be taking some major strides in coping with a deregulated industry and in escaping the big loan losses and high operating costs of the early 1980s.

“What is happening in the industry, primarily, is that (asset) growth is sluggish but earnings growth is up,” said Gerry Findley, a Brea banking consultant. “We’ve seen improvements in cutting non-interest costs and in getting better spreads” between interest income and interest expenses, he said.

“We still have banks suffering loan losses,” he said, “but operations generally are improving.”

Some of the bankers cited a better economy overall as a major reason for the resurging health of their institutions.

- Eldorado Bancorp, the one-bank holding company for Eldorado Bank in Tustin, said its consolidated net income for the second quarter rose nearly 42% to $442,000 from $312,000 a year ago. For the first six months of the year, net income rose 30.2% to $806,000 from $619,000 last year.

“Our profit margins were better; we were successful in cutting our non-interest costs, and we had lower delinquencies in loans, which is our brightest spot of all,” said J.B. Crowell, president of the 14-year-old bank.

As of June 30, Eldorado’s assets grew 5.4% to $180.4 million from $171.1 million a year earlier. Its loan portfolio gained 2.9% to $106.6 million from $103.6 million, and its deposits rose 6.2% to $163.6 million from $154 million.

- Orange National Bank in Orange reported that second-quarter net income rose 87% to $237,500 from $127,000 a year earlier. For the first six months, net income rose 26% to $495,000 from $392,000.

“The overall economy has picked up, and that has helped us,” said Wayne F. Miller, president of the 7-year-old bank. As of June 30, Orange National’s assets grew 14.3% to $104 million from $91 million a year earlier. Total loans increased 20.6% to $66 million from $54.7 million, and total deposits rose 1.7% to $95.5 million from $93.9 million.

- Mariners Bank in San Clemente posted a quarterly net income of $98,062, more than double the $44,480 it earned a year ago. Net income in the first six months rose 76% to $173,965 from $98,737.

At the end of June, the bank’s assets were $32.4 million, 21.3% higher than the $26.7 million a year earlier. Loans increased 29.5% to $22.5 million from $17.4 million, and deposits grew 23.5% to $29.9 million from $24.2 million.

- Liberty National Bank in Huntington Beach reported net income of $144,515 in the second quarter, contrasted with a loss of $131,438 a year ago. Net income for the first six months was $255,817, a dramatic increase over $6,491 earned in the same period last year.

Last year’s second quarter loss was caused by large write downs in real estate and commercial loans, said James D. Ott, chief financial officer.

As of June 30, Liberty National’s total assets grew 8.8% to $93.8 million from $86.2 million a year earlier. The loan portfolio grew 5.8% to $62 million from $58.6 million a year ago, and total deposits increased 8.7% to $82.7 million from $76.1 million.

- Marine National Bank in Santa Ana posted a six-month net income of $236,657, nearly triple the $84,674 it earned in the same period last year. Quarterly figures were unavailable.

At the end of June, Marine National had $63.4 million in total assets, a 14% increase over the $55.5 million a year earlier. Its loan portfolio rose 13% to $41.2 million from $36.4 million a year ago, and its deposits increased 13.4% to $55.7 million from $49.1 million.