Westcorp Profits for 1st Quarter Fall 9%

Westcorp Inc., the holding company for Western Financial Savings Bank in Irvine, posted net income of $2.9 million for the first quarter, down 9% from the $3.2 million in earnings for the same quarter last year.

The lower earnings were attributed to further writedowns in the value of the savings and loan’s portfolio of the high-yield, high-risk securities known as junk bonds.

A federal law enacted last summer requires thrifts to sell their junk bonds within five years, but Western Financial has been moving quickly to dispose of its portfolio.

At the end of the quarter, it had about $44 million in junk bonds, about 1.5% of its $2.9 billion in assets, down from a high of $110 million last year. (It had $94 million at the end of September, a month after the law took effect.)

Quarterly revenue for the holding company rose 21% to $86.5 million from $71.3 million for the period last year. Company assets rose slightly to $2.92 billion from $2.89 billion a year ago.