H. F. Ahmanson & Co. and Great Western Financial Corp., two of the nation’s largest savings and loan holding companies, Wednesday reported higher net earnings for the third quarter but lower income for the first nine months of the year.
Despite the downturn for the nine-month period, both companies predicted that results for the entire year will show improvement over 1987.
Los Angeles-based H. F. Ahmanson, parent of Home Savings of America, the country’s biggest thrift, as well as Bowery Savings Bank, said third-quarter net income jumped 30% to $56.1 million from $43.4 million in the same period last year.
Beverly Hills-based Great Western Financial, which owns Great Western Bank, posted a 21% earnings increase to $68 million from $56 million in the year-ago quarter.
Both thrift companies reported higher interest income and a record amount of loan originations for the quarter.
“It is especially significant that net interest income rose 8% in the third quarter, compared with a year ago, and that margins on new real estate loans continued to exceed margins on the company’s existing portfolio,” said James F. Montgomery, Great Western chairman and chief executive.
For the nine months ended Sept. 30, H. F. Ahmanson recorded a 19% decline in earnings to $135 million from $167 million in the same period of 1987. The company attributed the drop to a 74% reduction in after-tax gains on loan sales because of lower market prices and a deferral of much of the profits from the sales until it is collected as loan servicing income.
Great Western reported a 4.5% earnings slump to $189 million from $198 million for the first nine months of 1987. Great Western said year-to-date gains from the sale of loans and gains on securities and other investments slipped to $75 million for the nine months from $122 million in the same period last year.
Still, the two companies said they will earn more in 1988 than they did in 1987.
“It appears now that 1988 will be a better profit year for us than 1987,” an H. F. Ahmanson spokeswoman said.
“Based on these solid (third-quarter) results, we expect that total 1988 earnings will surpass those reported for 1987 by an ample margin,” Montgomery said.