Blaming rising interest rates, the chairman of Golden West Financial Corp. said Friday the thrift's third-quarter earnings per share were down 9% to 91 cents per share, compared to $1 per share for the same period last year.
The Oakland, Calif.-based parent company of World Savings and Loan Association earned $56.1 million in the quarter versus $63.8 million in the year-earlier period.
Golden West had net income of $183.4 million in the first nine months of 1994, down from $205.9 million in the same period last year. But that translated into a 10% year-over-year drop to $2.91 in earnings per share for the first nine months, from 1993's $3.22 per share.
Herbert M. Sandler, Golden West's chairman and chief executive, called the results "typical" of a rising interest rate environment. "Our primary spread contracted.
As a consequence, third-quarter net interest income dipped even though our loan portfolio grew solidly."
Mr. Sandler said the $30 billion-asset thrift's expenses increased, primarily because of inflation, ongoing business expansion, and the one-time costs associated with the relocation of Golden West's operations center.
Despite the shrinking mortgage market, Golden West was able to take advantage of growing interest in adjustable-rate mortgages. Third-quarter originations totaled $1.8 billion, 13% more than last year's $1.6 billion.
For the first nine months of 1994, new loan production amounted to $4.6 billion, down slightly from the $4.8 billion reported for the first three quarters of 1993.
Golden West's ratio of nonperforming assets and troubled debt restructured to total assets was 1.55% at Sept. 30.