O.C. S&Ls;’ Total Loss in ’90 Less Than in ’89

Struggling through a slump in real estate and tougher federal regulations, Orange County’s savings and loan industry reported a combined loss of $472.5 million last year, compared to $863.3 million in 1989.

Ten locally based thrifts reported a net loss in 1990 and 14 reported net earnings. Most of the red ink was attributed to two failed institutions: Lincoln Savings & Loan in Irvine and the beleaguered FarWest Savings & Loan in Newport Beach.

Lincoln, which failed two years ago and was sold earlier this month by regulators, lost $525.8 million in 1990. FarWest, battered by falling junk bond values and hurt by real estate loans, lost $263.9 million last year. Regulators seized it in January.

Other top money-losing S&Ls; were Union Federal Savings Bank, a subsidiary of Brea-based UnionFed Financial Corp., with a $37.2-million loss; failed Beach Savings & Loan in Huntington Beach, with a $7-million loss, and United California Savings Bank in Anaheim, with a $5.9-million loss.

The best performing thrift was giant American Savings Bank with net income of $247.4 million. Results from the Irvine thrift, formed in late 1988 from some assets of failed American Savings & Loan, included a small loss at the failed Huntington Savings & Loan branches in Huntington Beach that it purchased last June.

Other good performers last year were Household Bank in Newport Beach with $41.8 million in net income, Downey Savings & Loan in Newport Beach with $40.4 million and Beverly Hills Savings Bank in Laguna Hills with $16.2 million.

The results were based on financial reports from 24 county-based S&Ls.; In 1989, results included figures from 32 thrifts, eight of which have since been sold or closed by regulators. New West Federal Savings, a self-liquidating thrift formed from the bad assets of old American Savings, is not included because it does not report profits or losses.

While thrifts nationwide are downsizing to meet tough capital rules and to cope with losses caused by the slumping real estate market, most Orange County thrifts did not shrink much. Overall, the local industry’s assets dropped only 1.8% to a total of $54 billion.

Household grew 11.5% to $7.9 billion and Downey grew 10.1% to $4.2 billion. ITT Federal Bank in Irvine broke the $1-billion mark by increasing its assets 30% to $1.2 billion.

Among the big thrifts, it was FarWest, struggling to survive, and the government-run Lincoln, along with the self-liquidating New West, that dropped the most assets. FarWest shed 14.7% to $3.7 billion, while Lincoln fell 13.1% to $2.5 billion. New West dropped 17.3% to 7.9 billion.

Downsizing was much more prevalent among the smaller thrifts, many of which could be wiped out with only a few major loan losses. But again, the bigger cuts came at the government controlled shops--Malibu Savings & Loan in Costa Mesa (29.7% to $139.1 million) and Beach Savings (27.5% to $81.8 million).

Sterling Savings & Loan in Irvine, which must sell its investments in real estate to comply with the 1989 federal thrift restructuring law, reduced its assets 45.3% to $92.1 million and took a $5.7-million loss. Its president, Robert K. Parker, has said the thrift’s owners intend to sell off all its assets gradually, paying off all depositors and closing its doors.