Auto Loans Drive Westcorp to Record Quarter

Fueled by consumer financing and a $110-million bond offering, Westcorp, the holding company for Western Financial Savings Bank in Orange, posted a record third-quarter net income of $3.1 million, up 35.6% from last year’s $2.2 million.

The company also reported record net earnings of $8.8 million for the first nine months, up 49.5% from last year’s nine-month figure of $5.9 million.

The savings bank, which accounts for nearly all of the company’s financial figures, reported $972 million in assets on Sept. 30, a 64% increase from the year-earlier total of $592 million. Stephen W. Prough, Western Financial’s president, said the institution’s assets topped the $1-billion mark early this month.

The savings bank has been one of the few S&Ls; nationwide that has been permitted by the Federal Home Loan Bank Board to increase its assets by more than 25% a year.

Born in 1983 out of a merger between an S&L; in Northern California and an Orange County thrift and loan whose assets were tied to automobile loans, Western Financial has devoted about half of its assets to consumer financing, primarily auto loans.

It fashioned a bond offering last year based on automobile loans as collateral and sold the $110-million issue in January. It recently proposed a similar bond offering worth $200 million.

Western Financial’s total net loans at the end of September had grown by 64.3% to $880 million from $535.5 million a year earlier, while total deposits had risen 15.2% to $584 million from $507 million.