Reports of big profit gains kept rolling in last week from large western thrifts and regionals. Expense controls helped the California contingent, and strong local economies buoyed those elsewhere.

The regional banks reporting improvements included U.S. Bancorp, Portland, Ore., which earned $127 million in the second quarter, 29% more than a year earlier; and First Security Corp., Salt Lake City, with an 18.5% increase to $42.9 million.

Big thrifts with improved results included Great Western Financial Corp., Chatsworth, Calif., with a 57% increase to $79.3 million and Golden West Financial Corp., Oakland, Calif., with a 42% rise to $76.5 million. In addition, H.F. Ahmanson & Co., Irwindale, Calif., registered a 16% increase to $68.7 million, and Washington Mutual Inc., Seattle, reported a 28% increase to $61.4 million.

"At the banks, the earnings were pretty much as expected, with some flattening of the (net interest) margin and nonperformers trending a little higher," said Campbell K. Chaney, a Rodman & Renshaw Inc. analyst based in San Francisco.

"On the thrift side, we're definitely seeing a compression of the (net interest) margin, (which they) seem to want to make up for with higher loan volumes," Mr. Chaney added.

But Unionbancal Corp., the San Francisco-based affiliate of Bank of Tokyo/Mitsubishi Ltd., became a notable exception to that trend by reporting a 43% drop in net income to $44.4 million.

Like its much bigger rival, Wells Fargo & Co., the results of $28 billion-asset Unionbancal were depressed by an April 1 merger, which resulted in one-time charges in the second quarter of $61.3 million.

But even if the merger charges are excluded, Unionbancal's report disappointed stock analysts who follow the minority interest in the company that is publicly traded.

The median per-share earnings estimate was $1.41, according to a survey by First Call. Unionbancal's reported per-share earnings were 71 cents, or $1.37 excluding merger charges.

"From my standpoint, it was a bit disappointing on the revenue side," said Joseph K. Morford, an Alex. Brown & Sons Inc. analyst in San Francisco.

Mr. Morford said that a sluggish California economy and management focus on the merger of Union Bank and Bancal Tri-State Corp. that created Unionbancal apparently stifled revenue growth.

Net interest income for the combined companies fell $7.5 million in the second quarter due to a 14 basis point decline in the net interest margin to 4.77% and a rise of only $139 million in total loans to $20.5 billion. Noninterest income rose only $2.7 million to $106 million.

"The local economy here in California, while showing some improvements, has yet to translate that into increased loan demand in the state's banks," Mr. Morford said.

"And, to some extent, management has had to focus on the merger integration and cannot be as aggressive in going out and trying to capture new business," he added.

U.S. Bancorp's per-share earnings of 82 cents beat by 7 cents the median analyst estimate compiled by First Call. But the surprisingly strong results were entirely attributable to one-time items, such as a $5.2 million after-tax gain on securities sales; a $17.3 million gain on branch sales in the December merger with West One Bancorp; a $5.9 million restructuring charge on the West One deal; and the June 6 acquisition of California Bancshares.

First Security Corp. rebounded from a disappointing first quarter with second quarter earnings that generally pleased analysts. The company's loan portfolio grew at an annualized pace of 16%. Net interest margins also expanded, boosting net interest income 4%.

Cost-cutting from a major reengineering effort called Project Vision also helped.

Meanwhile, in a demonstration of the economic strength in Utah and neighboring states, First Security competitor Zions Bancorp continued to post some of the industry's best earnings. Net income for the $6 billion- asset company rose 22% to $25 million, and its return on equity was a strong 22.4%

As for thrifts, analysts said that one of the strongest quarterly reports came from Golden West Financial Corp. Rising interest rates boosted originations of its core adjustable-rate mortgage product by 32% to $1.9 million.

The company's yield on earning assets less cost of funds rose 27 basis points to 2.08%. But its ratio of nonperforming assets to total assets only increased to 1.24%, from 1.07%.

H.F. Ahmanson touted growth in its new consumer loan portfolio. But Sanford C. Bernstein & Co. analyst Jonathan Gray said he would have liked originations adjustable-rate mortgages to be higher, given a favorable rate environment.

The company funded $1.4 billion of residential mortgages, down $200 million from last year, but up $100 million from the first quarter.

Analysts were pleased that expenses at Great Western Financial appeared to be under control, after coming in unexpectedly high in the first quarter.

Washington Mutual Inc. used its July 16th earnings release, which preceded its announcement last week of merger plans with American Savings Bank, to state a lofty new financial goal: to boost earnings per share at least 15% annually.

The second quarter results were in line with that ambition, with earnings per-share rising 26% to 76 cents. Growth in mortgage and commercial loans boosted net interest income 4% from the first quarter to $178 million.

Fee income rose 17% to $37.6 million, excluding gains and losses on the sale of loans and mortgage-backed securities. Fee growth was aided by strong sales of checking accounts.

"We applaud the company's concerted effort to grow its non-interest income," UBS Securities analyst Gareth Plank wrote in a note to investors.

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