S & Ls; See Deposits Grow Sharply as Stock Market Declines
Benefiting from a stock market rollback that convinced some investors to put their money elsewhere, Orange County’s largest savings and loans reported an 8% increase in local deposits in the 12 months ended June 30, according to the Business Journal list.
That compares with a 3% rise in OC deposits in the previous 12-month period.
The 20 thrifts in this year’s list reported total deposits here of $14.95 billion, up from $13.80 billion in 2000. The 20 thrifts on this year’s list added 580 jobs in OC, an increase of 11% to 5,769, but that rise was mostly due to an increase of 395 local jobs at No. 1 Washington Mutual.
Washington Mutual repeats as the list leader, with deposits of $5.5 billion. But, the firm’s market share of deposits in OC was down to 37% from 40% last year, as it failed to grow its deposits while many other players posted double-digit growth rates. Washington Mutual added two branches during the period, while its deposits per branch dropped from $110 million to $106 million.
Seattle-based Washington Mutual has been No. 1 on the Business Journal list of savings and loans, which is ranked by deposits in Orange County, for the past two years. Its acquisitions of American Savings in 1996, Great Western in 1997 and Home Savings of America in 1998 secured its position as the county’s largest, as well as the national title.
Newport Beach-based Downey Savings & Loan came in at No. 2 this year, leapfrogging last year’s No. 2, California Federal Bank, which fell to No. 4 this year. Downey’s deposits here of $2.2 billion were up 21% from last year. Downey opened one new branch during the year and its average deposit per branch rose to $100 million from $87 million last year.
“In OC we just added one branch, but overall we have been very aggressive,” said Richard Grout, executive vice president and director of retail banking at Downey Savings. He said that the firm has benefited from the turmoil in stock markets as investors have moved their funds from stocks to money-market instruments.
“We have had some very healthy growth in our money-market deposits as customers are looking for a safe haven,” he said.
No. 3 World Savings Bank recorded a 28% growth in deposits to $2.1 billion, the highest growth rate among the top 10 S & L; in the list, and also good enough to push it past California Federal, which still posted a respectable 12% growth in OC deposits to $2.06 billion.
“We are the beneficiary of that (turmoil in the stock market) as anybody else,” said Marion Sandler chairman of the board and CEO of World Savings Bank.
In January, World Savings Bank acquired World Savings & Loan Association, which ranked No. 3 on last year’s list.
“To be sure, the public is much more interested in liquidity and they are more security conscious,” she said.
Sandler said that the firm also has benefited from offering higher interest rates to its customers than its competition.
“We follow but we don’t lead and it takes us longer to get our rates in line,” Sandler said. “During this period our rates have been higher.”
World Savings has been emphasizing its liquid account to customers, rather than commercial deposits.
“As the economy has been heading south, consumers have been more concerned about their jobs and security,” said Sandler, adding that they prefer liquid assets rather than investing in stocks that are going down. World Savings’ nationwide deposits also grew, by 28% to $57.5 billion as of June 30.
Due to high growth posted by Downey and World Savings, the top four S & Ls; on the list increased their local market share a tick, to 79% from 78%.
Four thrifts moved up the list from last year, eight maintained their rankings and five dropped. Three firms made it to the list for the first time, while one dropped off. Fourteen of the S & Ls; reported increases in their deposits, while five reported declines.
Irvine-based Commercial Capital Bank was the fastest growing S & L; in the list, posting a 203% growth in deposits, to $33.8 million.
Commercial Capital was started through the creation of a mortgage company called FIP Mortgage in March of 1998. In January 2000, the company acquired Mission Savings & Loan Association, a bank based in Riverside County. Through a share exchange that was completed in December 2000, Mission, which was subsequently renamed Commercial Capital, became a subsidiary of Commercial Capital Bancorp. FIP Mortgage also became a subsidiary of Commercial Capital.
Western Financial Bank, ranked No. 6, was the biggest loser in deposits. The S & L; saw its deposits shrink by roughly $70 million, or 9%. That drop comes on the heels of a 56% growth in deposits at Western Financial in the prior period. The thrift’s retail division customers are individuals and small businesses, and it offers money-market accounts, certificates of deposit and other investment services as well as loans, lines of credit and trade finance services, account analysis and cash management. The thrift’s deposits supply WFS Financial, an automobile-lending unit of parent Westcorp. n
