Robust lending, stronger local economies, and better fundamentals enabled a handful of western banks and thrifts to meet or beat analysts' expectations for their first-quarter earnings.

"Loan growth and the strengthening California economy are the common themes," said Campbell Chaney, analyst with Sandler O'Neill Partners, Walnut Creek, Calif. "But to get that loan growth you have to cut prices, so revenue is hurting a little bit."

U.S. Bancorp, the Portland, Ore.-based company that agreed last month to be acquired by First Bank System Inc., earned $121.5 million, up 8% from the year-earlier period. Earnings per share came in at 80 cents, matching analyst predictions.

Driving the numbers was loan growth of 8%-contributing to a similar rise in net interest income-and improved efficiency. U.S. Bancorp reported an efficiency ratio of 52.51%, down from 56.34% a year earlier.

The higher income led to returns on equity and assets of 18.44% and 1.49%, respectively, both up somewhat from last year, the bank reported.

Golden West Financial Corp., the Oakland, Calif. thrift that ranks fourth in the nation, with $38 billion of assets, earned $83.4 million in the quarter, a substantial jump from the year-earlier quarter, when the company registered a one-time loss due to the writing off of goodwill.

The company earned $1.45 a share, 8 cents more than analysts' expectations.

"They got off to a great start, but they will face some challenges in the latter part of the year in terms of margin compression," said Thomas Theurkauf, an analyst with Keefe, Bruyette & Woods. The thrift's interest income was better than expected, he said, growing by 5% to $674.3 million.

Boosting that loan growth was the increasing popularity of adjustable- rate mortgages, the thrift's primary product.

Bancorp Hawaii continued to struggle under the island state's sluggish economy, getting most of its income gains from its diversified market in the Pacific.

The $14 billion-asset bank earned $35.5 million in the quarter, up 8.5%. On a per-share basis, the bank earned 88 cents, beating analysts' expectations by a couple of pennies. Nonperforming assets rose 39% to $87.6 million in the quarter, or 1% of total loans, the bank reported.

Zions Bancorp., the $7.2 billion-asset Salt Lake City bank, continued to benefit from being in one of the most prosperous regions of the country. Loan growth was an impressive 24.6%.

Zions earned $26.7 million, 12.8% more than in the year-earlier quarter. Its earning per share of $1.81 matched analyst expectations. Returns were among the best in the industry, 21.5% on equity and 1.42% on assets.

Asset quality remained spark-ling, with nonperformers constituting just 0.30% of total loans, the bank said.

Downey Financial Corp. of Newport Beach, Calif., in its first quarter under chief executive officer James W. Lokey, reported a 16.7% increase in net income to $12.3 million. Earnings per share of 48 cents beat analysts' expectations by 9 cents, including some one-time gains.

Net interest income increased by 23.4% to $38.1 million, reflecting improving margins, Downey said. Nonperforming assets, a problem in the past for Southern California thrifts, dropped by 35% to $60.9 million.

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