Citing the adverse impact of “temporarily higher...

Citing the adverse impact of “temporarily higher taxes” and a decline in interest income, Great American First Savings Bank reported a 16% drop in third-quarter earnings Tuesday.

Net income for the three months ended Sept. 30 was $21.7 million, down from the $26 million reported for the same three months a year ago. For the year to date, Great American’s profit stands at a record $73.2 million, up from the $65.3 million reported for the same three quarters last year.

Great American’s higher corporate tax rate, which will return next year to approximately the same level as in 1986, accounted for $3 million of the reduction in quarterly earnings, Roger Lindland, senior vice president, said Tuesday.

Great American’s earnings were also negatively affected by a drop in its net interest spread to 2.11% as of Sept. 30, down from 2.25% on June 30. The effect was offset somewhat by the S&L;’s “increase in assets at work” over the same period, Lindland said.

Despite the off quarter, Great American Chairman Gordon Luce said at a presentation Tuesday before the San Diego Stock & Bond Club that the S&L;’s fiscal 1987 profit will “approach” the record $93.7 million reported last year.

Revenue for the quarter was $352 million, up 6% from the $332.2 million reported last year. Year-to-date revenue was $1.05 billion, up 14.7% from the same nine months last year.

As of Sept. 30, Great American’s assets were $14.3 billion, up from $13.7 billion on June 30. After Great American’s merger with Olympia, Wash.-based Capital Savings earlier this month, assets grew to $15 billion.

Deposits were $9.5 billion as of Sept. 30, up from $9.1 billion on June 30.