NEWPORT BEACH — Downey Savings & Loan reported net income of $12.5 million for the first quarter, a 5% drop from the $13.2 million earned in last year's first quarter, but thrift officials said Thursday that the results are stronger than they appear.
Last year's profit came mostly from one-time gains on the sales of shopping centers and other properties--$12.4 million before expenses--while this year's net income was generated entirely from the thrift's core business--interest on loans and investments.
The Newport Beach thrift enjoyed a bigger profit margin in 1991 because the cost of its funds--the amount it pays to depositors and others in interest--was more than half a percentage point lower than last year, said Gerald H. McQuarrie, Downey's chief executive.
Even so, the thrift declined in a number of areas, reflecting a tougher real estate economy. Quarterly revenue fell 6% to $95.3 million from last year's $101.4 million and deposits dropped slightly to $3.38 billion at the end of March from $3.44 billion a year earlier.
Downey's loan portfolio stood at $2.9 billion at the end of March, a 7% increase over $2.7 billion at the same point last year. But the amount of loans it funded during the first quarter dropped drastically to $61.2 million from $163.7 million in last year's first quarter.
"With the recent pickup in loan demand," McQuarrie said, "the company expects to increase lending in both the residential and consumer areas."
The S&L's assets inched up to $4.1 billion at the end of March from $4 billion a year earlier.
DOWNEY'S FIRST QUARTER
(Dollars in thousands, except per-share data)
Percent 1990 1989 Change Total revenue $95,261 $101,425 -6.1 Net earnings 12,463 13,156 -5.3 Earnings per share 0.77 0.81 -4.9 Assets* 4,145,231 4,040,281 2.6
* As of the end of March
\o7 Source: Downey Savings & Loan\f7