Most of the large western banks and thrifts that reported earnings last week generally impressed analysts with solid loan growth, wider margins, and lower expenses.

"We're seeing these institutions run much better this year than ever before," said Frank Barkocy, banking analyst with Josephthal Lyon & Ross. "We saw good maintenance of the balance sheets and significant focus on overhead ratios."

Leading the pack in loan growth was Washington Mutual Inc. of Seattle, which saw its total lending increase by 25% in the quarter, to $3.6 billion. That figure was driven primarily by a booming residential loan business which increased by more than one-third over the prior year's quarter, the thrift reported.

The $45 billion-asset company reported a net loss in the quarter of $87.9 million, or 81 cents a share, which was attributed to a number of one-time costs, primarily from expenses associated with its acquisition of Keystone Holdings Inc., the parent of American Savings Bank.

Excluding those events, the company achieved a strong quarterly increase in net interest income, up 13% to $307 million. Wamu also reported a more than 20 basis point improvement in its net interest margin to 2.76%.

"We saw some very big numbers in there, such as fee income up 30% and checking accounts up 24%," said R. Jay Tejera, an analyst at Dain Bosworth Inc. "That's impressive."

Great Western Financial Corp. of Chatsworth, Calif., reported net income of $85 million, about a 13% decrease from the year-earlier period, excluding large one-time costs in the fourth quarter 1996.

Earnings per share, again excluding the one-time events, were 58 cents per share, about 3 cents better than analysts' consensus estimates.

The primary one-time charge was a $68.3 million pretax expense from the overhaul of the company's mortgage origination operation and branch structure, and its general push to become more banklike, the $42.9 billion- asset company said.

"Their numbers were a bit disappointing for what a dominant mortgage originator should be accomplishing, but it's not like they've been asleep at the switch-far from it," said Gareth Planck, a thrift analyst with UBS Securities.

Retail banking fees improved by 25% to $50.7 million for the quarter, a sign that Great Western's focus on nontraditional thrift businesses is starting to pay off, analysts said.

U.S. Bancorp of Portland, Ore., benefited from 7% loan growth in the quarter, which contributed to net income of $121 million, or 79 cents per share. The results matched analysts' consensus estimates exactly.

The $33 billion-asset company's net income increased by 8% from the year-earlier quarter, excluding merger-related charges and other one-time items from 1995.

For the full year 1996, the bank's margin increased by 10 basis points to a healthy 5.42%, a figure driven in part by a 7% increase in lower-cost deposits.

Fee growth in the quarter also improved, rising by 7% to $133 million, the bank reported.

"It was just a really good, very straightforward, on-target quarter," said Sally Pope Davis, a banking analyst with Salomon Brothers.

She pointed out, among other improvements, a significant drop in the company's efficiency ratio, which stood at a stellar 56.1% at yearend, compared with 65.4% at the end of 1995.

The two largest Utah banks, First Security Corp. and Zions Bancorp., both reported impressive gains in net income in the fourth quarter, propelled by strong loan growth and healthy margins.

First Security reported net income of $51.2 million for the quarter, up 40% from the year-earlier period, excluding one-time charges. Earnings per share were 66 cents, a penny below consensus estimates, according to First Call Corp.

"It was an excellent revenue quarter," said Sheri Ptashek, a banking analyst at Salomon Brothers. "And securities gains helped them over the top as well."

The $14.7 billion-asset bank benefited from both an improving mortgage market and one of the fastest-growing economies in the country.

Spencer F. Eccles, chief executive of First Security, said in a conference call that the consensus estimates of $2.70 for 1997 may be a bit high, however, as the bank expects higher loan losses for the year and higher costs due to more investments in technology.

Nonperforming assets increased by 43% from a year ago's fourth quarter, to $38.1 million.

For the full-year 1996, overall credit quality remained solid, with nonperformers amounting to just 0.41% of total loans, the bank reported.

The situation was similar at $6.5 billion-asset Zions, which posted a 19% increase in net income in the quarter, to $27 million.

"This was another good, solid quarter for Zions," said Joseph K. Morford, 3d, a banking analyst with Alex. Brown & Sons Inc.

"The story here was very strong revenue growth. Net interest income was up at a double-digit rate, as was loan growth."

The bank beat analysts' consensus estimates by 3 cents, earning $1.80 per share in the quarter.

Fee income, largely driven by service charges, trust revenue, and loan service fees, increased by 19% from the year-earlier period. Profitability remained strong in the quarter, with returns on assets and equity reaching 1.61% and 21.04%, respectively, the bank reported.

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