Getting Rid of Junk: Behind the $5.3-million second-quarter net income posted last week by Westcorp, the parent of Western Financial Savings Bank in Irvine, is a related item: The thrift is extricating itself from its junk bond holdings in good fashion.

Western Financial has ridded itself of 70% of the high-risk, high-yield corporate securities it once held, and it has reduced its junk bond portfolio to less than 1% of its $3 billion in assets at the end of June.

The S&L; once had $111 million--or 5% of its assets--in junk bonds. Sales and writedowns have left it with less than $30 million now. A recent resurgence of the junk bond market allowed the thrift to record a $1.4-million credit to its provision for securities losses.

Under last year's federal law restructuring the S&L; industry, thrifts are required to sell their junk bond portfolios within five years.

--Compiled by James S. Granelli, Times staff writer

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