County S&Ls; Post Losses of $740 Million : Lincoln Leads Way in 2nd-Quarter Deficits
Orange County’s 35 savings and loans posted a combined loss of $740 million in the second quarter, most of it coming from insolvent Lincoln Savings & Loan in Irvine.
Sixteen local savings institutions lost money in the second quarter, with the biggest losers being Lincoln and four other insolvent institutions. Lincoln posted a $787,983 loss in the second quarter. Profits of $63.4 million by other S&Ls; helped lower the combined loss to $740 million.
But 11 other S&Ls; also posted losses. In the first quarter, 18 S&Ls; posted losses, and in previous quarters in recent years, similar numbers of county S&Ls; have lost money.
The aggregate loss wipes out a first-quarter combined profit of $36.7 million and would appear to doom the county’s crop of savings institutions to another annual loss. They haven’t posted an annual profit for at least six years.
Most of the money-losing S&Ls; in the second quarter were small ones that found it difficult to compete because of falling interest rates and flat or falling loan production, said Gerry Findley, a Brea financial institutions consultant.
“Yet they’re offering these high CD (certificate of deposit) rates, and they’re getting squeezed,” he said.
The county’s results compare with a second-quarter loss of $950 million for all thrifts statewide and $3.7 billion for S&Ls; nationwide.
In Orange County, the 16 unprofitable S&Ls; lost a combined $802 million. All but $3.8 million came from four of the five insolvent institutions--Lincoln, Perpetual Savings Assn. in Santa Ana, which was closed recently by federal regulators, Pacific Savings Bank in Costa Mesa and American Interstate Savings & Loan in Newport Beach. The remaining insolvent S&L;, First California Savings Bank in Orange, posted a $557,000 profit.
Besides the insolvent S&Ls;, four other thrifts--Constitution Savings & Loan in Tustin, Huntington Savings & Loan in Huntington Beach, Delta Savings Bank in Westminster and Security Federal Savings & Loan in Garden Grove--have capital totaling less than 3% of their assets, the required minimum level. Regulators have installed new managers at Security Federal without seizing it.
The 18 profitable S&Ls; last quarter earned a combined profit of $63.4 million, with American Savings Bank and FarWest Savings & Loan leading the way. American Savings posted net income of $31.4 million, and FarWest added $9.4 million to the total.
New West Federal Savings is a liquidating S&L; created to dispose of the bad assets of the old American Savings & Loan.
COUNTY BASED SAVINGS AND LOANS
Total 1st Quarter 2nd Quarter Regulatory Assets Net Income Net Income Capital Savings and Loan (Millions) (Thous.) (Thous.) (Thous.) New West $21,890.0 $0 $0 $200,010 American 15,684.6 42,418 31,377 624,531 Household Bank 5,776.1 -725 3,588 325,663 Far West 4,897.8 5,867 9,407 222,374 Lincoln 3,810.5 -28,790 -787,983 -631,352 Downey 3,773.5 21,007 5,768 269,687 Western Financial 2,719.0 3,087 2,571 216,232 Mercury 2,312.4 -768 -763 75,531 Beverly Hills 1,668.2 1,341 563 53,904 Pacific 1,037.0 -11,465 -10,160 -260,147 Newport Balboa 847.2 826 1,404 54,437 United California 668.7 9 9 35,913 Butterfield 657.5 3,064 3.047 50,971 Guardian 648.4 2,300 268 26,869 Western Empire 491.7 -709 -282 15,884 Charter 414.7 -20 -634 13,306 Fullerton 356.8 640 1,365 26,077 San Clemente 341.3 -251 -435 11,163 Universal 278.9 867 467 13,476 Standard Pacific 270.3 -106 119 16,444 Malibu 212.2 77 -263 10,175 Sterling 198.9 1,217 1,959 21,517 Westport 171.1 -11 -753 5,712 First California 135.9 -1,874 557 -74,514 Huntington 126.2 89 225 896 Beach 98.6 148 407 6,664 Irvine City 90.4 -25 -71 4,215 Security 77.1 247 -202 962 Constitution 72.4 -168 -108 1,403 Cornerstone 70.0 -95 -67 3,656 Plaza 66.3 -68 285 3,859 Delta 58.0 -169 -164 667 Perpetual 18.4 -585 -648 -11,456 American 24.9 -529 -313 -219 Interstate Pioneer 14.7 -111 -124 478 Orange County 69,979.7 36,735 -742,627 1,334,988 Totals
Net Worth Savings and Loan To Assets New West 0.9% American 4.0 Household Bank 5.6 Far West 4.5 Lincoln -16.6 Downey 7.1 Western Financial 8.0 Mercury 3.3 Beverly Hills 3.2 Pacific -25.1 Newport Balboa 6.4 United California 5.4 Butterfield 7.8 Guardian 4.1 Western Empire 3.2 Charter 3.2 Fullerton 7.3 San Clemente 3.3 Universal 4.8 Standard Pacific 6.1 Malibu 4.8 Sterling 108 Westport 3.3 First California -54.8 Huntington 0.7 Beach 6.8 Irvine City 4.7 Security 1.2 Constitution 1.9 Cornerstone 5.2 Plaza 5.8 Delta 1.2 Perpetual -62.3 American -0.9 Interstate Pioneer 3.3 Orange County 1.9 Totals
