Thrifts are harvesting the benefits of today's home loan market. That is, thrifts in certain locations.

Last week interest rates for 30-year, fixed-rate mortgages were pushing 9% -- good news for thrifts.

With their ability to portfolio loans, thrifts can make loans the government agencies can't accept, And they can offer lower interest rates than mortgage banks, which must Sell their loans into the secondary market.

So, thrifts like Coast Federal are reaping record originations in adjustable-rate loans.

The Los Angeles thrift is funding more than $200 million a month, said Ray Martin, chief executive officer. Mr. Martin said adjustable-rate loans based on the 11th District cost-of-funds index are Coast's most popular product.

"It's an adjustable-rate market, and thrifts, especially in California, are gaining a larger share of the market," he said.

Perhaps only in California. In the first five months of this year California thrifts gained a 20.2% market share in the Golden State, up from 18.9% during the period last year, according to TRW Redi Property Data, an analysis company.

Banks elsewhere are not faring as well.

In southern Florida, loan production has been "very slow" in recent months, said Thomas M. Wohl, chief executive officer, Home Savings Bank, Hollywood, Fla.

"I think there has never been a worse time for thrifts," Mr. Wohl said.

Despite the pricing advantage, loan production in general has been as slow as sludge, he said. He blamed higher interest rates.

The future "looks bleak," he said.

Michael J. Brown Sr., CEO, Harbor Federal Savings Bank, Fort Pierce, Fla., said low prices mean nothing in a stagnant marketplace.

"I can portfolio loans if I want and I can sharpen my pencil if I want, but I don't see the advantage for thrifts today," Mr. Brown said. "We are out there clawing for every deal like everyone else."

Between the California boom and the Florida bust rests Illinois thrifts. They are faring moderately better than they have in recent months.

Bell Federal Savings & Loan, Chicago, is enjoying a 5% to 10% increase in loan volume over last year, said Robert G. Rowen, chief executive officer. Mr. Rowen said he hopes rates increase a little so that adjustable-rate mortgages remain in demand.

That demand may go cold. Mr. Rowen expects that winter will chill loan volume no matter what interest rates do.

But don't expect Jack Frost to nip at the loan originations of First Federal Savings Bank of Colorado, Lakewood.

Malcolm E. "Bud" Collier Jr., chief executive officer, admits that First Federal "has got a unique situation here." The Denver area, First Federal's arena, has a strong housing market and economy. "Plus, we just don't have the competition here," Mr. Collier said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.