Downey S&L; Posts Drop in Third-Quarter Earnings

Downey Savings & Loan Assn. reported Wednesday that its quarterly earnings dropped 17 cents a share and attributed the decline to higher taxes from increases in pretax income.

The Newport Beach thrift reported a profit of $7.7 million, or 48 cents a share, for the third quarter, compared to $10.5 million, or 65 cents a share, in the 1992 third quarter. Assets as of Sept. 30 were $3.48 billion, up slightly from $3.43 billion reported a year earlier.

In light trading on the New York Stock Exchange, the company’s stock lost 87.5 cents a share Wednesday to close at $22.50.

“The earnings were right on target with what was expected,” said Campbell Chaney, an industry analyst with Dakin Securities in San Francisco. “Their stock dropped today because there was some hope that the company would provide more information on its shareholder value program. Some people were even expecting an announcement that the company would be sold.”

Earlier this year, the thrift hired investment bank Lehman Bros. to evaluate ways to enhance value for shareholders. Tom Prince, chief financial officer at Downey, said Wednesday that the Lehman evaluation process continues and that no announcement is scheduled.

Downey reported that its earnings for the year to date increased to $39.4 million, or $2.44 a share, compared to profit of $33.2 million, or $2.05 a share, for the first nine months of 1992. The boost, however, was due to new accounting rules, which gave the thrift a onetime gain of $15.1 million.