Data Reveals Loss for O.C. Banks, Profit for Thrifts
Orange County’s small community banks lost a total of $7 million for the first three months this year, but local savings and loans, some of which are among the nation’s largest, earned a combined $66.2 million, according to federal statistics released Friday.
The quarterly results for the 27 banks based in the county reflect the rise in interest rates this year as well as the lagging effects of Southern California’s worst recession in 60 years. Deep cuts in real estate values, which back many loans, are barely leveling off, and corporate customers who also felt the pinch are only starting to increase their borrowing.
For the county’s 17 S&Ls;, the dramatic drop in demand for home loan refinancings, caused by the higher rates, hurt thrifts that sell the mortgages they make. But most of those that kept the loans in their portfolios fared well.
In addition, the county’s six thrift and loans--hybrids of banks and finance companies--earned a combined $2.5 million for the three-month period.
A few large gains and a few large losses spelled the difference for the banks and S&Ls.; Only half of them posted profits, while the other half dragged down total earnings, according to regulatory figures compiled by Sheshunoff Information Services in Austin, Texas.
Bank of Newport in Newport Beach, one of numerous banks operating under orders from regulators to improve their financial conditions, lost $4.6 million for the first quarter. Others among the 13 money losers were Sunwest Bank in Tustin, $1.1 million, and CommerceBank in Newport Beach, $936,000.
The biggest profits among the 14 banks that earned money were posted by Eldorado Bank in Tustin, with $604,000; followed by National Bank of Southern California in Newport Beach, $236,000, and Landmark Bank in La Habra, $190,000.
Two banks no longer exist. Pioneer in Fullerton was seized last week by regulators and closed. Colonial in Santa Ana has an agreement to sell its deposits and is liquidating itself to become a private mortgage banking company.
Among the S&Ls;, Household Bank in Newport Beach, with $34.9 million in earnings, and American Savings Bank in Irvine, with $32.2 million in profit, led the group of eight profitable S&Ls.; American is the nation’s fourth-largest S&L.; Downey Savings & Loan in Newport Beach earned $5.7 million.
ITT Federal Bank in Newport Beach was the biggest money-losing S&L;, suffering a $6.8 million hit. Union Federal Savings Bank in Brea, with a $5.3 million loss, and Guardian Savings & Loan in Huntington Beach, with a $5.1 million loss, were the next-largest losers among nine that posted red ink. Guardian is a failed S&L; being operated by regulators, who have been unable to sell it.
