Several midsize thrifts in Southern California are returning to health along with the region's economy, first-quarter earnings reports showed.
Stung by plummeting real estate prices and defense industry cutbacks, many of the region's savings and loans had been in intensive care for most of this decade.
But holding companies for such thrifts as Hawthorne Savings, Redlands Federal Bank, and Hemet Federal Savings all turned a profit in the first quarter. All three had lost millions of dollars in the preceding few years.
"Things have definitely bottomed out here in California, and we should continue to see an overall improvement," said Jerry A. Jones, managing director at Duff & Phelps Capital Markets Co., Los Angeles.
Redfed Bancorp is one thrift that has rebounded sharply. It posted first-quarter earnings of $941,000, compared to a $2 million loss in the first quarter of 1995. In all, the San Bernardino County thrift lost more than $8 million last year and more than $26 million in 1994.
With $858 million of assets, Redfed has benefited from a 39% drop in nonperformers compared with the first quarter of 1995. The thrift was hard hit by defense cutbacks. When both Norton and George Air Force bases were closed, Redfed was caught with a large number of multifamily loans on its books.
The company has cut nearly 20% of its staff, frozen its pension plan, and merged two branches.
Hawthorne Financial Corp., a $773 million-asset company based in El Segundo, reported first-quarter earnings of $2.6 million, compared to a $10.1 million loss for the same period last year.
And HF Bancorp, parent of Hemet Federal, reported net income of $799,000 for the first quarter, up from a $577,000 loss during the same quarter last year.
Another Southern California thrift - Glendale-based Imperial Thrift and Loan Association - posted first-quarter net income of $2.24 million, compared to a loss of $261,000 in the 1995 period.
At least two other thrifts in the region built on success that began in 1995.
Quaker City Bancorp, Whittier, parent of Quaker City Federal Savings and Loan Association, reported net earnings of $993,000 for the first quarter, up from a $563,000 profit a year ago. And Cenfed Financial Corp., Pasadena, parent of Cenfed Bank, nearly tripled its earnings, to $4.3 million in the first quarter from $1.6 million in the 1995 period.