Lower interest rates, lower operating costs and a "substantial increase" in lending activity is spurring Far West Financial Corp. toward a second straight year of record earnings, Alexander L. Popof, senior vice president of the Newport Beach company, said Wednesday.
So far in 1985, Far West--the holding company for Far West Savings & Loan Assn.--has been able to outpace its performance of last year, when the sale of its shares in Gulf Corp. accounted for more than 75% of its earnings in the first nine months.
For the third quarter ended Sept. 30, Far West posted profits of $4.65 million, more than triple the $1.5 million earned in the third quarter last year. In the first nine months, the company has earned $11.75 million, a 6% increase over almost $11.1 million in profits for the same period last year.
"If you take out the special investment gain (for the sale of Gulf shares) from last year's figures, you see that we have really gone up from about $2.6 million," Popof said.
The proceeds from the sale of the Gulf stock have been re-invested in commercial and residential loans, he said.
Total third quarter revenue was $72.3 million, 26% above the $57.2 million in revenues reported for the corresponding period last year. For the first nine months, Far West's revenues topped $207.7 million, an increase of nearly 20% from $173.3 million last year.
Far West's total loans as of Sept. 30 were nearly $1.8 billion, a 42% increase over the $1.26 billion in loans a year ago. Meantime, total assets climbed to $2.3 billion, a 28% increase over assets of $1.8 billion a year ago.
"1984 was a record year, our best ever," Popof said. But for 1985, he said, "we're actually slightly ahead in the first nine months. If we can continue at our present pace, we'll have another record year."
In 1983, Far West's majority owners, the Belzberg brothers of Canada, teamed up with T. Boone Pickens, chairman of Mesa Petroleum Corp., in an effort to gain control of Gulf.
When the group failed to win a proxy battle with Gulf's management, the price of Gulf's common shares shot up, and Far West quickly sold the stock in early 1984 for $16.8 million, realizing a profit of more than $8.4 million.