Great Western, CalFed Profits Hit New Highs

The parent firms of Great Western Savings in Beverly Hills and California Federal Savings in Los Angeles--two of the nation’s largest savings and loans--said Wednesday that they earned record third-quarter and nine-month profits for the periods ending Sept. 30.

Great Western Financial said third-quarter earnings jumped 35% over year-ago levels to $77.3 million, while nine-month earnings rose 65% to $223 million.

CalFed Inc. reported third-quarter profits of $48.5 million, up 19% over the third quarter of 1985, while nine-month results rose 25% to $130 million.

The CalFed and Great Western results followed in the wake of record earnings reported earlier this week by H. F. Ahmanson, the parent company of Home Savings of America. With some notable exceptions, the large savings and loans based in California have in recent years led the S&L; industry in financial performance.

The continuing surge in earnings at CalFed and Great Western was attributed largely to increased loan volumes and to gains from the sale of loans and investments.

CalFed said it opened six new real estate loan centers in Southern California to meet increased mortgage demand. “We also continue to see improvement in earnings from our life insurance and other lines of business,” said George P. Rutland, CalFed’s chief executive. Both companies also mentioned the progress they’ve made in making adjustable-rate loans in an environment in which many consumers want fixed-rate mortgages because interest rates have dropped well below 11%.

“Although many lenders have returned to an emphasis on fixed-rate lending, 96% of Great Western’s third-quarter loan volume was in adjustable-rate or short-term loans,” said Chairman James Montgomery.