Great Western Financial Reports Best Year Ever

January 23, 1986|TOM FURLONG

Great Western Financial Corp., the country's third-largest savings and loan holding company, reported Wednesday that its annual earnings more than doubled to $202 million in 1985, making it the best year in the firm's 99-year history.

The Beverly Hills-based financial company said year-end results included a profit of $67 million in the fourth quarter, also a record. Great Western earned $99.5 million in 1984, including a profit of $31.6 million in the final quarter.

Although the company had been expecting record results, profits were fueled by unexpectedly high volume in December, when total loans reached $1.1 billion, a monthly record. Loan volume for the year was $6.7 billion.

"We've never had a month like December before," Chairman James Montgomery said in a recent interview.

Great Western also noted that:

- Seventy per cent of its earning assets are now in adjustable-rate or short-term loans, up from 56% a year ago. These kinds of loans insulate earnings from large swings in interest rates, analysts say.

- Its interest margin was 2.8% on Dec. 31, compared to 1.74% on Dec. 31, 1984. The interest margin is the difference between a financial institution's cost of funds and its yields on investments.

"By every measure," Montgomery said in a news release, "the fourth quarter and 1985 were the most outstanding in the company's history."

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