OAKLAND, Calif. - Golden West Financial Corp., the parent of World Savings Bank, boosted net income 16% in the third quarter but missed analysts' earnings.
Net income of $137.4 million came to 86 cents per share, 1 cent shy of the analyst consensus.
Herbert M. Sandler, chairman and chief executive officer of Golden West, said that declining spreads and rising interest rates hurt earnings.
"During the past 12 months our loan portfolio has grown rapidly because of record originations," he said. "Even so, we have not yet enjoyed the full benefit of our mortgage growth, because our primary spread declined in response to rising interest rates."
The company reported loan originations of $5.5 billion in the third quarter, 52% more than a year earlier. For the first nine months of the year, new loan volume totaled $14.9 billion, up 75%.
The average loan balance was $48 billion for the quarter, up 32%, and $44 billion, up 23%.
Golden West had reported a 91% increase in originations for the first six months, to $9.4 billion, citing the popularity of adjustable rate mortgages, its specialty.