American Making Money the Old-Fashioned Way
With so many savings and loans calling themselves banks and itching to make consumer loans, American Savings Bank decided to buck the trend and redouble its efforts at doing what thrifts have long done--make home loans.
The focus on mortgages has paid off for the Irvine S&L.;
Last year, it poured more money statewide into residential loans--$4.4 billion--than any other thrift, including those more than twice its size. Only Bank of America, a true commercial bank that is 12 times bigger than American, provided more mortgage money. American ranked fourth in market share in 1994 and 24th in 1993.
American Savings has been on a two-year growth spurt, the first sizable growth since it was formed in late 1988 from the ruins of the failed American Savings & Loan. The thrift grew 13% over the last two years, ending last year with $19.6 billion in loans and other assets.
Part of the growth can be attributed to its focus on loans to residents in low- and moderate-income neighborhoods. It has become a model lender in such areas and last year devoted 55% of its mortgage money to those neighborhoods.
“We believe you can still make money in this business,” said Mario Antoci, the S&L;’s chief executive. “We think a lot of other thrifts have thrown in the towel.”
The total amount of money American provided in mortgages was well ahead of the $2.94 billion funded by the much larger Great Western Bank, the nation’s largest thrift, and the $2.92 billion by Home Savings of America, which ranks second.
American’s belief in the mortgage industry, Antoci said, “has become recognized by people we do business with--like Realtors and loan consultants.” They not only come to American to get loans for their customers, they come to American to work. The thrift has expanded its sales force 43% since May 1993.
Antoci said the thrift, which relied on adjustable-rate mortgages and its own sales force, decided to become more competitive in every aspect of home lending.
It now offers a range of loans from ARMs to fixed-rate mortgages, and makes loans brought to it by independent brokers. While it continues to hold some of the loans it makes in its own portfolio, it also has started a mortgage banking operation, which sells fixed-rate loans and certain ARM loans that American makes.
