Citadel Is Standout in Local S & Ls : Thrifts: The fact that housing loans make up 92% of the Glendale company’s portfolio is one reason for its steady 2nd-quarter profit figures.
Bucking a trend among local savings and loans, Citadel Holding Corp., the Glendale-based parent of Fidelity Federal Bank, said its second-quarter profit rose 4% from a year earlier, to $7.09 million from $6.82 million.
The earnings gain might not seem like much at first glance, but it looks superlative next to the enormous losses recently posted by its major savings-and-loan rivals based in Southern California.
In the quarter that ended June 30, GlenFed, which owns Glendale Federal Bank, lost $137.1 million; CalFed, parent of California Federal Bank, lost $10.9 million, and HomeFed Corp., operator of HomeFed Bank, lost $112.5 million.
The losses in large part reflected the dropping value of the thrifts’ commercial real estate holdings.
The smaller Citadel noted that its loans for residential housing--which typically carry less risk than commercial-property and construction loans--make up 92% of its total loan portfolio. That’s one reason why Citadel is able to maintain its profitability.
But Citadel--with $5.6 billion in assets as of June 30--is grappling with its own real estate problems nonetheless.
“The ongoing uncertainty in real estate markets and the growth of our nonperforming assets are significant concerns,” Citadel President William C. Walbrecher said in a statement.
In the six months that ended June 30, Citadel set aside $12 million for real estate losses and other sour loans--triple its “loan-loss provision” of a year earlier. The company said it set aside another $3 million for such losses last month alone.
And despite the modest improvement in the second quarter, Citadel’s net income for the first half of 1991 was down 18% from a year ago, to $11.5 million from $14.1 million.
Still, after announcing its strong second-quarter results last week, Citadel’s stock jumped about 6%. On Monday the stock closed at $31.375 per share.
