Westcorp Says Quarter Profits Nearly Double

Westcorp, parent of Western Financial Savings Bank, said Monday that its third-quarter earnings nearly doubled to $5.5 million, equal to 35 cents a share, from $2.8 million, 17 cents a share, in the same period last year.

For the nine months, the financial services company said earnings rose to $15.2 million, 93 cents a share, from $11 million, 66 cents a share last year.

The company credited the higher profits to a record increase in consumer lending, such as car loans. Westcorp made $227 million worth of such loans in the third quarter, 10% more than in the year-ago period.

But, Westcorp said, the weak real estate market caused the company to set aside an additional $6 million in the third quarter to cover possible losses from loans, for a total loss reserve of nearly $19 million to date.

“We have concerns about California’s real estate market, particularly as it relates to multifamily housing,” said Stephen W. Prough, Westcorp’s president.

Because of the weak real estate market, non-performing assets--loans delinquent more than 90 days and real estate the bank has already foreclosed upon--rose to 1.02% of the company’s total loans, up from 0.55% a year ago. Non-performing assets totaled $27 million in the third quarter. At the end of last year, the level of non-performing assets was at $17.7 million.

Western Financial Savings Bank, with assets of $2.6 billion, operates 26 bank branches across the state, including four in Orange County, as well as nine real estate loan offices, five automobile finance centers and 27 consumer finance offices through a separate subsidiary called Westcorp Financial Services.