Magazine article American Banker

CalFed Posts Surprise Loss, Halts Dividend; Ahmanson's Earnings Fall 3%; Coast Has Earnings of $21.8 Million

Magazine article American Banker

CalFed Posts Surprise Loss, Halts Dividend; Ahmanson's Earnings Fall 3%; Coast Has Earnings of $21.8 Million

Article excerpt

CalFed Posts Surprise Loss, Halts Dividend

LOS ANGELES - CalFed Inc. on Thursday reported an unexpected $10.9 million loss in the second quarter and suspended its dividend.

Meanwhile, H.F. Ahmanson reported that its second-quarter earnings fell 3%, to $60.8 million, or 52 cents per share, and Coast Savings Financial announced it earned $21.8 million, or $1.39 per share.

California's financial institutions are struggling with the softening of the state's real estate markets. With housing salws slow, the thrifts are generally suffering deops in loan originations.

Increase in Nonperformers

And, like their commercial bank counterparts, many are seeing jumps in nonperforming loans.

But there are signs that a pickup may be near. Many analysts believe that the level of bad loans has almost peaked. And lower mortgage rates and improved consumer psychology have boosted housing acitivity.

"In the second half, loan originations should be up over last year," predicted Joseph Jolson, thrift analyst at Montgomery Securities.

Another positive sign is that the rates that thrifts pay on deposits are falling faster than the rates they charge on their adjustable-rate margins.

CalFed, however, is still battening down the hatches. While its loss in the latest period was smaller than the $53 million deficit it racked up in the comparable period a year ago, some analysts expected CalFed to report a profit.

CalFed, Los Angeles, suspended its three-cents-a-share dividend, reflecting its "increased need" to preserve capital, the company said. The company is still in compliance with regulatory capital requirements.

More Reserves for Losses

CalFed set aside $59.6 million for losses on loans and real estate activities in the quarter ended June 30, compared with $99.1 million set aside in the same quarter of 1990. …

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