Home Federal Savings & Loan reported that higher effective tax rates and a reduction in gains on loan sales resulted in a 30% drop in net income from $26.6 million to $18.7 million for the third quarter ended Sept. 30.
Pre-tax income fell by just $523,000 during the third quarter, but taxes rose to $16.1 million from $8.7 million, Home Federal Chairman Kim Fletcher said. The S&L's effective tax rose in part because the federal government decreased the deductibility of provisions for loan loss reserves.
For the nine-month period ended Sept. 30, Home Federal's net income fell to $72.5 million from $75.7 million
The savings and loan industry has been hit by higher taxes and reduced gains from loan sales. H.F. Ahmanson & Co. and Great Western Financial Corp. cited those factors in reporting lower third-quarter net income this week.
Home Federal's assets rose by 4% to $13.3 billion, and deposits increased by 7.4% to $9.8 billion.