ORLANDO -- A winning smile warms the face of the average thrift executive these days when the topic of home lending comes up.

Since interest rates began ratcheting up last February, thrifts have been winning the residential lending war against mortgage bankers. And they know it.

"I can hit mortgage banks straight on; they are single-purpose institutions," said Cornelius D. Mahoney, president and chief executive of Woronoco Savings Bank, Westfield, Mass. "We are not paying any real attention to them."

That kind of swagger was common at the recent conference here of the Savings and Community Bankers of America.

"I think the portfolio lenders have a unique opportunity right now," said John D. Koch, executive vice president, Charter One Bank, Cleveland. "These should be the years of the portfolio lender."

Those years have begun at Great Western Bank.

"It feels like we are doing fine," said James F. Montgomery, chairman and chief executive of the bank's parent, Great Western Financial Corp., Chatsworth, Calif.

Mr. Montgomery, who wears a large, gold-and-diamond ring with the initials GW on it, said loan production at Great Western has been strong -- and continues to improve. He said the thrift was originating a solid amount of adjustable-rate mortgages in particular.

Mr. Montgomery said he expects Great Western to be selling adjustables to the secondary market next year. In addition to its money-making potential, that would be a sign of the thrift's robust portfolio.

Mr. Montgomery is now less concerned about competition from mortgage banks.

"I lived through the time when I had to bite my tongue while they said they were going to blow us away," Mr. Montgomery said.

Although he is still respectful of the market share staked out by mortgage banks, Mr. Montgomery expects many of them to disappear.

But the sickness afflicting mortgage banks -- higher interest rates -- is also hurting thrifts. Mr. Koch of Charter One said overall loan production had shrunk.

"We are going to be struggling to maintain levels of production," said Mr. Koch.

The poor lending market has created significant loan price competition, lenders said.

"Suicide pricing? I'd call it kamikaze pricing," said Louis V. Stadler, senior vice president at Milwaukee-based Security Bank.

Mr. Stadler said some thrifts were still pricing "to lose money." Great Western's Mr. Montgomery said profit margins would rebound when interest rates stabilize. Introductory rates especially are at cutthroat levels, he said. But Mr. Montgomery said executives at Great Western "haven't been unhappy with the margins we have been riding."

Standard Federal Bank, in Troy, Mich., will finish the year with greater loan production than in 1993, said Thomas R. Ricketts, chairman and president. Mr. Ricketts said loan production this year would reach $5 billion, up from $4.6 billion last year.

He also said helping other lenders make loans was one of the thrift industry's top growth businesses today.

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