The nation's thrifts may be having a feast because of the strong public demand for adjustable-rate mortgages. But competitive pricing for ARMs and the general decline in home-loan volume are taking their toll on third-quarter earnings.

Thrifts of all sizes and in all parts of the country are reporting earnings erosion from one or both causes. Commercial banks also reported problems with mortgage profits, but the impact on overall earnings was generally mild.

The three largest thrift companies started the ball rolling early last week.

The third-quarter report by Golden West Financial Corp. Oakland, Calif., was fairly typical. Chairman Herbert M. Sandler said, "Our primary spread contracted. As a consequence, third-quarter net interest income dipped, even though our loan portfolio grew solidly."

The company, the nation's No. 3 thrift company and the parent of World Savings and Loan, had a 9% drop in earnings for the quarter, to $56.1 million.

Similarly, in Irwindale, Calif., H.F. Ahmanson & Co., the largest thrift company and parent of Home Savings of America, said earnings had slipped 2.1% and attributed the drop to smaller net interest margins because of price competition and a decline in home-loan volume.

The announcement blamed the margin contraction mainly on a repricing lag in the 11th District Cost of Funds Index. But Charles R. Rinehart, president and chief executive, was pleased with the company's mortgage business anyway. "Our residential market share has increased in each of our major markets," he said.

In Chatsworth, Calif., No. 2 Great Western Financial Corp. showed a profit for the third quarter, against a loss a year earlier. But it also said net interest income had dropped because of margin compression and fewer originations.

With the earnings season at its peak, the downbeat reports continued all last week. Some examples from Friday's announcements:

* Great Lakes Bancorp., Ann Arbor, Mich., reported a profit of 24 cents a share, against a loss a year earlier from a nonrecurring charge.

"Lower revenue from gains on the sale of mortgages is offsetting lower credit-loss provisions," said Robert J. Delonis, president.

"Not only has the boom in refinancing activity come to an end, but higher interest rates have cut into what we would consider a normal level of mortgage banking activity. Gains on the sale of mortgages and securities amount to less than half a million dollars this year, compared with $8.6 million last year."

* California Financial Holding Co., Stockton, Calif., the parent company for Stockton Savings Bank, reported that third-quarter net operating income before any loss provisions totaled $3.5 million, down from $4.2 million.

"Declining interest margins caused most of the drop," said Robert Kavanaugh, president and chief executive. "Most of our loan portfolio consists of adjustable-rate mortgages indexed to the 11th District Cost of Funds Index, which generally lags the true interest rate environment.

"As a result, while our deposit costs have increased, we have not yet seen the benefits of a rate increase on our loan portfolio."

* Summit Bancorp, Bellevue, Wash., the holding company for Summit Savings Bank, reported net income of $226,000, or 10 cents per share, for the first quarter of fiscal 1995, which ended Sept. 30.

L. Mike Riley, president and CEO, said: "Net income for the quarter was substantially below the first quarter of fiscal 1994 primarily because of reduced mortgage production as rising interest rates ended the home mortgage refinancing boom."

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