S&Ls;, Banks in State Report Mixed Results
The state’s banks and thrifts continued showing mixed second-quarter earnings Thursday, as CalFed Inc. posted a loss, BankAmerica Corp. and Home Savings of America’s parent reported flat results, and Coast Savings financial recorded a strong profit turnaround.
Los Angeles-based CalFed said it lost $10.9 million in the three months ended June 20 and was discontinuing its dividend of 3 cents a quarter to conserve capital, or the financial cushion against losses.
All but the strongest of the state’s thrifts have slashed or eliminated dividends. Last October, CalFed first cut its quarterly dividend to 3 cents a share from 35 cents.
CalFed, parent of California Federal Bank, set aside $25.4 million for potential losses on loans and $34.2 million for losses on its real estate investments. For the six months, CalFed’s loss was $6 million, compared to a $34.1-million loss a year earlier. The thrift said it continues to be affected by the weak California real estate market.
As expected, BankAmerica Corp.’s earnings were virtually flat at $272 million, up 2% from the profit the San Francisco-based bank reported a year earlier.
BankAmerica, parent of Bank of America, was pressured into forecasting its results earlier this month after its three major rivals--Security Pacific Corp., Wells Fargo & Co. and First Interstate Bancorp--reported that they would show an increase in problem loans. B of A said a rise in problem loans domestically was more than offset by a drop in problem foreign loans.
BankAmerica also credited containing costs for helping boost its results. For the first six months of the year, BankAmerica’s profit was $554 million, up 2% from $545 million a year earlier.
Los Angeles-based H.F. Ahmanson & Co., parent of Home Savings of America, said its earnings dropped slightly to $60.8 million from $62.7 million a year earlier.
Ahmanson said its profit decline from a year earlier was due mainly to tax benefits it enjoyed in the year-ago period. Still, the thrift set aside an additional $57.4 million to cover possible losses on loans.
Coast Savings Financial posted a $21.8-million profit, a sharp turnaround from the $28.7-million loss a year earlier. More important for the Los Angeles savings and loan is that it has returned to compliance with federal capital guidelines, the first large California thrift to do so since the passage of the federal savings and loan bailout in 1989.
Results for Coast, the parent of Coast Federal Bank, were boosted in part by a $19.4-million pretax gain from the sale of its 19 branches in San Diego to Home Savings.
Elsewhere in the nation, ailing First City Bancorporation in Texas said its losses this year may even exceed 1990’s record loss. The bank, formerly headed by A. Robert Abboud, has been hurt by bad loans and a sluggish real estate market.
