Wedbush Morgan calls FirstFed Financial "late inning" California recovery play, maintains "buy" rating

Business Wire, June 11, 1996

LOS ANGELES--(BUSINESS WIRE)--June 11, 1996--Wedbush Morgan Securities views FirstFed Financial Corp. (NYSE:FED) as "a compelling buy for people seeking a `late inning' California recovery play, according to a newly released research report.

In updating its coverage of FirstFed, Wedbush Morgan maintained its "buy" rating.

Wedbush Morgan analyst Charlotte Chamberlain said her recommendation of FirstFed was based on four factors:

--FirstFed trades at 93 percent of book value and approximately five times normalized earnings.

--Los Angeles multifamily valuations are stabilizing.

--FirstFed's multifamily foreclosure notices have declined significantly.

--Substandard loans represent a significantly smaller proportion of FirstFed's portfolio than in past periods.

A comparison of FirstFed with two other large Southern California multifamily lenders shows that FirstFed has more upside price potential than the other two due to their iron grip on expenses and healthy loss reserves.

"On a normalized basis, we believe the company can earn $3.30 for 1997 as compared to $1.94 on a more conservative one-year basis," analyst Chamberlain said.

FirstFed, now trading at about $17, "has upside potential as high as $35," the report said.

Based in Santa Monica, Calif., FirstFed is the holding company for First Federal Bank of California, which operates 25 full-service savings offices and five loan offices in Southern California.

Wedbush Morgan Securities is one of the oldest and largest independently-owned securities and investment banking firms in the western United States.

CONTACT: Richard F. Roper, 310/393-0622