1st Interstate Net Dips; Ahmanson Profit Leaps

First Interstate Bancorp’s second-quarter profit fell 8% as losses continued at its troubled Arizona bank while H.F. Ahmanson & Co. reported a 51.3% earnings gain in the period.

During the April-June quarter, First Interstate earned $95.1 million, compared to $103.1 million in the same period in 1989. The 1989 net income included an extraordinary item of $8.1 million for utilization of previously unrealized tax benefits.

In late 1989, First Interstate took hundreds of millions of dollars in special charges to cover losses at its troubled banks in Texas and Arizona, which it attributed to the troubled real estate markets in those states.

The Los Angeles-based company, which, including licensees, has banks in 20 states, is making progress in reducing bad loans and trying to guard against additional regional economic problems, said Chief Executive Edward M. Carson.

“Our operations in Texas have been showing increasing profitability during the past two quarters and are meeting expectations,” Carson said in a statement.

The Arizona bank lost about $3.5 million during the second quarter after breaking even in the first quarter, as the effects of the real estate slump continued to be felt.

“Our operations in California, Oregon, Washington and Nevada continue to perform well. However, like many others, we continue to watch their regional economies for signs of emerging problems,” Carson said.

For the first six months, First Interstate’s net income fell 6%, to $222.3 million from $235.3 million.

At H. F. Ahmanson, parent company of Home Savings of America, the nation’s largest thrift, second-quarter net increased to $60.1 million from $39.7 million in the same 1989 period.

The Los Angeles-based firm attributed the gain to continued growth in core operating earnings, principally net interest income, which increased 24.3%.

For the first six months, net earnings increased to $121.8 million from $78.9 million in the first six months of 1989. That gain was also attributable to continued growth in core operating earnings, the firm said.

“These results show the company’s commitment to its strategy of building a growing and predictable earnings stream,” said Richard H. Deihl, chairman and chief executive. Core earnings, which exclude gains from loan sales and income from real estate development activities, accounted for 92.4% of second-quarter earnings, compared to 75.5% in the same quarter a year ago, he said.

Net interest income in the latest quarter totaled $275.9 million, a 24.3% gain over the year-ago period that the firm attributed to an increase in interest-earning assets, primarily adjustable-rate mortgages.

Deposits at Home Savings increased by a record $1.7 billion during the quarter and $2.4 billion for the first half.