Glenfed, Coast S&L; Profits Soar; FCA’s Off Slightly
The parent company of Glendale Federal Savings reported record quarterly earnings, Financial Corp. of America earned its fifth straight quarterly profit and earnings at Coast Savings & Loan more than doubled last year’s totals, the financial institutions said.
GlenFed earned $32.9 million in its first quarter ended Sept. 30, a 67% increase over last year’s quarter.
President Norman Coulson attributed the increase to “record loan volume and a significant increase in both . . . interest income and other fees.” GlenFed loaned $2 billion in the quarter.
Financial Corp. of America, based in Irvine, said it made $11.6 million in its third quarter, marking the fifth consecutive profitable quarter following extremely heavy losses in 1984. Last year, FCA reported a $12.3-million profit for the quarter.
FCA--parent of American Savings & Loan, the nation’s largest thrift--achieved its string largely because falling interest rates have allowed the firm to sell assets at a profit. FCA still is not making money on an operating basis but hopes to report an operating profit in the fourth quarter, Chairman William J. Popejoy said in a recent interview.
FCA’s earnings statement showed that the firm continues to add to its loan loss reserves--$76.2 million in the third quarter--but that its total volume of problem loans, including those in delinquency and foreclosure, fell to $1.77 billion on Sept. 30 from $1.93 billion on Aug. 31.
Popejoy warned, however, that problem-loan totals could rise again in the fourth quarter because of “possible problems with some large groups of loans made to major borrowers.” (Popejoy previously indicated that these problems are related to large office buildings in Texas.)
FCA’s assets ballooned for the second quarter in a row, primarily because the firm is aggressively buying mortgage-backed securities. FCA’s assets stood at $34.1 billion on Sept 30., 17% higher than they were on June 30.
Coast Savings’ third-quarter earnings were $11.7 million, compared to $5 million earned in the third quarter of 1985. Nine-month earnings were $37.6 million, more than triple the $10.7 million earned last year.
Coast said interest income was up sharply, problem loans remained well below the industry average and assets were up 28% over year ago levels to $8.8 billion.
