Profits Decline at Great Western, Ahmanson

H. F. Ahmanson & Co., the nation’s second-largest thrift concern, said Tuesday that earnings fell 49% for the third quarter and 30% for the nine months, primarily because of a steep decline in profit from the sale of mortgage-backed securities.

Meantime, Great Western Financial Corp., the nation’s third-largest thrift holding company, said its net was off by 28% for the third period and 14.5% for the nine months. It blamed a higher tax rate, reduced margins because of rising interest rates and reduce loan sales.

Los Angeles-based Ahmanson, parent of Home Savings of America, netted $40.3 million for the three months ended Sept. 30, compared to a year earlier when it earned $78.9 million.

For the nine months, it earned $155 million, compared to the year-earlier period when it had a profit of $223.3 million.

The biggest factor in the decline for Ahmanson was its decision earlier this year to defer the sale of mortgage-backed securities because rising interest rates had significantly reduced the profit it would show on such transactions. It has said it hopes to sell the securities later this year.

For the third period, Ahmanson’s gain on the sale of those securities dropped nearly 93% to $7.7 million, compared to $104.7 million a year earlier. For the nine months, profit from such securities dropped nearly 45% to $111.1 million from $201.3 million.

Because it is holding the mortgage-backed securities rather than selling them, its loan portfolio swelled by 20% in the past six months, compared to only 2% in 1985 and 1986 combined.

Beverly Hills-based Great Western said it earned $57.8 million for the three months ended Sept. 30, compared to a year earlier when it earned $79.4 million.

For the nine months, its net dropped to $195.8 million, compared to a year earlier when it earned $228.9 million.

The company said rising interest rates had reduced its margin--the difference between what it pays for funds and what it charges for loans--to 2.6%, compared to 3.03% a year earlier.

Great Western also showed smaller gains from the sale of mortgage-backed securities. For the three months, the figure dropped nearly 8% to $18.6 million and for the nine months it was down 11.2% to $81.6 million.