The larger West Coast thrifts have chalked up one of their strongest quarters in recent memory, analysts say.

Excluding a multitude of one-time charges in the third quarter, most notably for payments to replenish the Savings Association Insurance Fund, the performance of the large thrifts justified analysts' cautious optimism for the industry.

"The positive story we're expecting for 1997 remains in tact," said Thomas O'Donnell, an analyst at Smith Barney Inc. "The California economy is turning, expense controls are in place, buybacks continue - all the fundamentals are there."

The quarter was marked by generally steady credit costs, limited balance sheet growth, and some net interest margin pressure, analysts said. Margin pressure, driven by the rising cost of funds, kept earnings from ratcheting up even more, analysts said.

"When you back out all the noise, you're seeing operating earnings at 20% to 30% up over last year, and I expect similar increases next year," said Bruce Harting, an analyst at Lehman Brothers.

The $50.6 billion-asset H.F. Ahmanson & Co., of Irwindale, Calif., recorded a $79.5 million net loss for the quarter, caused by a $144.4 million charge for the thrift fund assessment and the $8.3 million purchase of 61 branches divested in the First Interstate Bancorp-Wells Fargo & Co. merger.

Without the charges, earnings would have improved 11%.

Analysts were most impressed with the company's continued commitment to buy back shares - 1.9 million in the quarter - and its 5% reduction in nonperforming assets to $897.6 million, or 1.77% of total assets.

"This is really the most positive earnings release I've seen out of Ahmanson in roughly three and a half years," said Charlotte A. Chamberlain, an analyst with Wedbush Morgan Securities. "I would have liked to have seen more loan originations," she said, "but you can't have everything."

In nearby Chatsworth, Great Western Financial Corp., with $43.5 billion of assets, registered a $39.9 million net loss, caused by a $188 million thrift fund assessment. Without the charge, earnings would have jumped 6%.

Analysts were not as pleased with Great Western's margin, which at 3.10% was down slightly from the second quarter.

"Ahmanson and Great Western are similar companies that have different trajectories," said David Dusenberry, an analyst at CS First Boston. "Whereas Ahmanson delivers on its promises, Great Western continually disappoints, particularly on its operating expenses."

Golden West Financial Corp., the $37 billion-asset Oakland thrift company, suffered from a one-time thrift fund charge of $133 million, but reported net income of $136 million, a more than 100% increase from 1995's third quarter. The jump resulted primarily from one-time gains from tax benefits and accounting changes.

At Washington Mutual Inc. in Seattle, net income would have increased 21%, without one-time charges. Instead, the thrift earned $40.2 million, down 22%. The $22.4 billion-asset thrift still expects to complete the conversion of branches from its acquisition of Stockton, Calif.-based American Savings Bank by yearend, and should begin realizing savings from the deal by the start of the year.

In Newport Beach, Calif., $5 billion-asset Downey Financial Corp., would have notched a 40% jump in earnings without the thrift fund charge. Including it, Downey reported a $6.5 million net loss.

"I think we can say that we've reached thrift heaven," said Wedbush Morgan's Ms. Chamberlain. "We've been through thrift hell with the asset problems, thrift purgatory with the loan loss provisions, and now we've finally made it to thrift heaven with some good earnings. It's been a long, hard road."

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