Hurting from a big fourth-quarter provision for...
Hurting from a big fourth-quarter provision for anticipated losses on loans and interest income, Great American First Savings Bank reported lower fourth quarter and fiscal 1987 earnings Tuesday.
Great American’s fourth-quarter net income of $13.1 million on revenue of $367.5 million was off from net income of $27.9 million on revenue of $336.5 million over the same three months last year. The recently ended quarter reflects a $29 million charge for loan and interest loss reserves, more than the $12.8 million provision taken in the year-ago quarter.
Jim Krzeminski, Great American’s chief financial officer, said the higher loan-loss provision was taken because of anticipated problems with loans inherited from Capital Savings, the Olympia, Wash.-based thrift that Great American acquired last year. Great American also anticipates some problems with loans in Arizona because of residential overbuilding, he said.
Great American’s recently ended fourth quarter also suffered by comparison because the S&L;’s gain on sales of mortgage-backed securities was $14.8 million, down from the $25.5 million gain over the same quarter in 1986.
For the fiscal year ended Dec. 31, Great American reported a profit of $88.1 million on $1.4 billion revenue, down from a $91.8 million profit on $1.2 billion in revenue in 1986.
Great American Chairman Gordon Luce said only a $4.3-million special premium paid to the Federal Savings and Loan Insurance Corp. during the second quarter to help prop up failing thrifts kept Great American from exceeding the prior year’s earnings performance.
