Profits Down at Thrift Giants Ahmanson, Great Western
LOS ANGELES (AP) _ First-quarter profits at H.F. Ahmanson & Co. fell 53.4 percent, in part because of the cost of aggressive sales of bad loans and repossessed real estate, the parent of Home Savings of America said Tuesday.
On the bright side, the thrift’s inventory of the troubled loans and properties assets declined.
Cross-town rival Great Western Financial Corp. said its first-quarter profits tumbled 44.6 percent, with continuing high provisions for mortgage losses and sales of non-performing or troubled real estate assets. Its non- performing assets continued to grow.
The deep California recession hurt both Ahmanson, the nation’s largest S&L holding company with $49 billion in assets, and No. 2 Great Western, with assets of $38 billion. First-quarter results for both in 1992 had benefited greatly from new accounting standards for income taxes.
Details of the thrifts’ results: H.F. Ahmanson & Co.
The Irwindale-based company earned $32.9 million, or 23 cents per share, during the January-March quarter, compared with $70.7 million, or 57 cents per share, a year earlier. The quarter last year included $47.7 million in benefits from the income tax accounting change.
Non-performing assets fell to $2.16 billion, or 4.45 percent of total assets, from $2.22 billion, or 4.61 percent of the total, at year-end. They were down 10 percent from the peak in October, when they made up 5.02 percent of total assets, spokeswoman Mary Trigg said.
″The company’s efforts to improve its balance sheet and position itself for future growth are paying off, despite continuing difficult economic conditions in several key markets,″ Ahmanson Chairman Richard H. Deihl said in a statement.
At closing on the New York Stock Exchange, Ahmanson shares fell 25 cents at $18. Great Western Financial Corp.
The San Fernando Valley-based thrift earned $45.2 million, or 30 cents per share, compared with $81.6 million, or 60 cents per share, a year earlier. The earlier quarter included a $61 million gain on tax accounting, partially offset by a $30 million charge due to retiree benefit accounting changes.
First quarter 1993 results were reduced by provisions of $88 million for loan and real estate losses, compared with $107 million in the first quarter of 1992. Total reserves for losses were $624 million at March 21 compared with $322 million a year earlier.
Chairman James F. Montgomery said single-family home loan delinquencies continued to rise, but the thrift’s sale of non-performing assets was gaining velocity. Still, troubled loans and real estate rose from 4.48 percent of total assets on March 31, 1992, to 5.43 percent at the end of last month.
Great Western shares fell 62 1/2 cents to close at $17.25 on the NYSE.