1st-Quarter Profits Rise at Three Banking Firms

A strong real estate market and improved economic conditions helped three California financial institutions post strong first-quarter earnings.

Golden West Financial Corp., Oakland-based parent of World Savings & Loan, said first-quarter net income climbed 16%, thanks to rapid growth in its adjustable-loan portfolio.

Earnings rose to $348.3 million, or $1.12 a share, from $299.7 million, or 97 cents, a year earlier. That beat analysts’ expectations, sending the company’s share price up $1.20 to $61.20 on the New York Stock Exchange.

Net interest income rose 14% to $703.6 million. Non-interest income rose 38% to $82.6 million.

“Our loan portfolio, which is our primary earning asset, grew $4.8 billion in the quarter, or at a 19% annualized rate,” Chairman Herbert Sandler said. “This growth is important, because the larger the company’s mortgage portfolio, the greater our ability to generate profits.”

Almost all of Golden West’s loan originations in the quarter were adjustable-rate mortgages.

Beverly Hills-based City National Corp., parent of City National Bank, said net income rose 9% to $55.5 million, or $1.09 a share, from $50.9 million, or $1, a year earlier.

Its revenue rose 11% to $196.8 million, while loan quality continued to improve, largely reflecting California’s growing economy, executives said.

“California’s economic and business conditions are good, particularly here in Southern California, where City National does 90% of its business,” Chief Executive Russell Goldsmith said. “City National’s strong first-quarter results reflect double-digit increases in revenue, deposits and wealth management fees, and meaningful growth in loans and our net interest margin.”

City National released earnings after regular trading, when shares fell $1.68 to $66.98 on the NYSE.

San Francisco-based UnionBanCal Corp. reported that first-quarter net income rose 16% to $182 million, or $1.21 a share, from $157.5 million, or $1.05, a year earlier. The latest earnings were helped by a positive tax adjustment amounting to 7 cents a share, the company said. However, even without the tax help, profit was up 8.6%. Revenue rose 8.5% to $665 million.

“The company produced good growth in loans and deposits, with average loans up 20% and average noninterest-bearing deposits up 12% over the first quarter last year,” said President and CEO Norimichi Kanari.

The company said credit quality also improved, with nonperforming assets declining 59% from a year earlier.

UnionBanCal also released earnings after regular trading. Shares fell $1.24 to $58.24 on the NYSE.