Ahmanson's Earnings Climb 5%; Glenfed Shows a Small Setback
LOS ANGELES -- H.F. Ahmanson & Co., the nation's largest thrift company, reported Wednesday that its third-quarter profits rose 5% to $65.1 million, or 55 cents a share.
Meanwhile, Glenfed Inc., Glendale, announced that its profits declined by 5% to $17.1 million, or 50 cents a share, in its fiscal first quarter. The company's earnings were bolstered by big gains on the sale of loans.
Thrifts are benefitting from wider net interest margins. Their cost of funds is declining much more rapidly than the interest rates they get on their adjustable-rate loans. However, that is being offset by a big drop in the volume of loans as housing sales slump.
Ahmanson's assets slid 5% to $47.9 billion from the year-ago level of $50.3 billion. The company booked $2.3 billion of new loans, compared with $3.2 billion in the third quarter of 1990. Ahmanson's spread widened to 3.08%, from 2.56%.
For the nine months, Ahmanson earned $181.8 million or $1.55 per share, down 5% from the $190.5 million or $1.64 per share in the first nine months of 1990.
Cost Reductions Pay Off
An agressive cost-cutting program has paid off dramatically for Glenfed. Noninterest expenses dropped 35% to $72.2 million in the 1991 first quarter, from $110 million a year ago.
Glenfed reaped profits of $31.7 million on the sale of loans, compared with only $1.5 million in the first quarter a year earlier. The company socked that back into loan loss provisions totaling $55.1 million, nearly four times the $14.3 million set aside in the first period of 1990.