Downey S&L; Reports Dip in 2nd Quarter Net

Downey Savings & Loan Assn. in Costa Mesa, often regarded as one of the nation’s better-managed savings institutions, said that its second quarter net income fell 19% from a year earlier but that net earnings for the first six months hit a record high.

The S&L;’s profits for the year also should reach a new high, surpassing last year’s record $53.4 million in net earnings, predicted Gerald H. McQuarrie, chief executive officer of the 29-year-old institution.

Downey posted second-quarter net income of $15.8 million, down from $19.5 million a year earlier. The 1985 figure, however, included a $7-million net gain on a special loan package sale, McQuarrie said.

The S&L;’s net income for the first six months rose 21.6% to $37.1 million from $30.5 million.

New loans in the quarter boomed to $312.2 million, more than treble the $94.3 million in loans generated during last year’s second quarter. In the first six months, loan volume increased 30.8% to $473.7 million from $362 million a year earlier.

As of June 30, the S&L; had $2.5 billion in assets, a 8.7% increase from $2.3 billion a year earlier. Deposits rose 5.3% to $2 billion from $1.9 billion, and the loan portfolio rose 4.8% to $1.75 billion from $1.67 billion.