Westcorp Inc. said Thursday that the continuing real estate slump has prompted its savings and loan subsidiary to lower the value of nine joint ventures, causing a $9.2-million write-down and an addition of $8 million to reserves for possible future losses.
The holding company for Western Financial Savings Bank said the thrift's action means that third-quarter earnings will likely be "break-even." Quarterly results will be reported soon, the company said.
Westcorp is taking the big step now because it can afford to do so, said Stephen W. Prough, the company's president. It earned $10 million in the first six months and will still see 1992 as its "second or third most profitable year," Prough said.
The S&L; has been operating under a supervisory agreement it signed with federal regulators to improve internal systems, reduce bad and questionable loans and maintain levels of capital higher than those typically required of thrifts.
Prough said the company decided on its own to write down the value of three housing tracts and six apartment complexes in San Diego County.