3rd-Quarter Earnings Rise 40% at Golden State

From Bloomberg News

Golden State Bancorp said Wednesday that fiscal third-quarter earnings rose 40%, as the thrift added low-cost deposits, widening the gap between interest rates it paid and rates it collected on loans.

The Glendale-based parent of Glendale Federal Bank said net income rose to $32 million, or 45 cents a diluted share, in the quarter ended March 31, from $22.9 million, or 33 cents, in the year-earlier period. Golden State was expected to earn 44 cents a share, according to analysts.

Excluding costs related to the thrift’s breach-of-contract lawsuit against the federal government and other extraordinary items, Golden State earned $35.6 million, or 50 cents a diluted share, compared with $27.6 million, or 40 cents, a year ago.


Golden State shares rose 75 cents to close at $38.50 on the New York Stock Exchange.

Golden State’s gain was driven by a 12% jump in net interest income from a year ago to $107.7 million.

The increase came as the thrift’s interest rate spread widened to 2.95%, from 2.56% the year before as it added checking accounts, which pay little or no interest.

Checking account balances rose 67% from the year before to more than $1.7 billion, amid acquisitions and the thrift’s advertising campaign designed to lure customers away from California’s major banks.

Earlier this year, Golden State agreed to merge with California Federal Bank, a closely held thrift owned by financier Ronald Perelman and Texas banker Gerald Ford, in what will create the second-largest U.S. savings and loan.

At a Glance:

* Woodland Hills-based Wellpoint Health Networks Inc. said first-quarter profit rose 16% as the managed-care company increased its membership and cut costs.

Net income rose to $58.5 million, or 83 cents a diluted share, compared with earnings before a charge and a gain of $50.4 million, or 75 cents, a year earlier. The results matched expectations.


* San Francisco-based McKesson Corp.’s fiscal fourth-quarter earnings rose 54%, beating expectations, as the drug wholesaler sold more medicine. Profit from continuing operations was $56.5 million, or 57 cents a diluted share, compared with $36.8 million, or 38 cents, a year earlier. McKesson had been forecast to earn 55 cents by analysts.

* Marina del Rey-based Quarterdeck Corp. reported a fiscal second-quarter net loss of $7 million, or 16 cents per diluted share, on revenue of $13.3 million. That compares with a net loss of $832,000, or 2 cents, a year ago, on revenue of $23.1 million.