Offering a glimpse of how investment sales contribute to the profit picture at financial institutions, Cal Fed Bancorp said it reaped $4.4 million in fee income from mutual funds and annuities in the first quarter.

Investment product sales at the Los Angeles-based thrift's 124 branches in California and Nevada topped $112 million in the first quarter, setting a record for per-branch sales. By contrast, investment sales totaled $81.1 million and added $3.7 million to noninterest fee income during 1995's first quarter.

Jeffrey A. Rigsby, executive vice president for consumer banking, said the improvements reflect customers' growing comfort with alternatives to fixed-income investments.

"Our strategy hasn't changed, but individuals' appetites have," Mr. Rigsby said. "People are getting a little more aggressive."

Financial institutions have been selling investment products for years, but Cal Fed is one of only a few that spotlights sales and income in quarterly financial reports.

Sales of mutual funds and variable annuities accounted for 76% of Cal Fed's investment products volume, with fixed annuity sales providing the balance, Mr. Rigsby said.

Total sales were the highest for any quarter since 1992, when Cal Fed's investment product sales exceeded $116 million. At that time, the company had 137 branches.

Fees from investment products sales during the first quarter this year accounted for almost one-third of the thrift's $14.6 million in fee income, just behind savings deposit fees of $7.3 million.

Fueling the increase were growing sales of stock funds and an OppenheimerFunds Inc. variable annuity underwritten by Massachusetts Mutual Life Insurance Co. and introduced last year, Mr. Rigsby said.

Cal Fed works with Invest Financial Corp., a third-party marketer, and has shunned developing its own funds to offer only those of name-brand fund companies, including Oppenheimer and Putnam Investments.

The rise in fee income is one facet of an improving business picture at Cal Fed, which suffered from real estate losses in the early 1990s. "The bank is in a strong turnaround mode, given positive trends in margins, stable credit quality, and continued tight management of expenses," said Leslie Nelkin, an analyst at Furman Selz, New York.

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