Western S&L; Cites Flat Home Values in Layoff : Employment: The Irvine firm is dismissing up to 57 workers and closing a loan unit.

Western Financial Savings Bank, convinced that real estate values will continue to be flat for some time, said Thursday that it has shut down its home-improvement loan unit and will lay off up to 43 workers.

In addition, the Irvine savings and loan will dismiss 14 others in its 57-branch network statewide as it consolidates work and reduces costs.

The 57 layoffs represent about 5% of its 1,200-member staff, but a number of those targeted to leave may instead be transferred to the thrift’s auto-loan division, which represents about half the thrift’s business and is growing.

“The auto finance unit will expand 30% this year, so we’re going to see if there are opportunities there for some of the people,” said Stephen W. Prough, president.

The thrift, the subsidiary of Westcorp Inc., expects to save $3 million a year by its consolidations.

The closing of the home-improvement loan operation is designed to get the thrift out of a business that is getting too risky, Prough said. With lower property values, the thrift has less of a chance to recoup money it loans on second trust deeds, or junior mortgages. The thrift continues to make home loans secured by first trust deeds.

Westcorp was one of the top-performing public companies in the state last year in spite of operating restrictions imposed by regulators. Those restrictions were lifted in January. The company earned $3.9 million for the first quarter.