Golden West Financial Corp. said Thursday that its first-quarter profit rose 9.2% as it made $6.9 billion in new loans amid the home refinancing boom, a 28% increase over the same period in 2002.
Oakland-based Golden West operates World Savings Bank, the largest thrift based in California. It earned $260 million, or $1.67 a share, compared with $238 million, or $1.51 a share, a year earlier. Analysts had forecast earnings of $1.62 a share, and Golden West shares jumped $1.26 to close at $74.51 on the New York Stock Exchange.
Also Thursday, rapidly growing Irvine sub-prime mortgage specialist New Century Financial Corp. said it earned $45.7 million, or $1.84 a share in the first quarter, up 48% from $30.9 million, or $1.21, a year ago. That beat expectations of $1.67 a share, and New Century shares rose 72 cents to $34.32 on Nasdaq. The company said it now expects to earn $7.40 to $7.50 a share this year, up from previous guidance of $7.25.
East West Bancorp, a San Marino bank with a largely Chinese American clientele, earned $11.8 million for the first quarter, or 48 cents a share. That was the same as a year earlier, when a required accounting change boosted earnings by $788,000, or 8%. Thursday's results matched the estimates of analysts surveyed by Thomson First Call, and East West shares rose $1.91 to close at $32.78 on Nasdaq.
Golden West said it took in $2.5 billion in new deposits during the quarter, up from $1 billion a year earlier, as investors opted out of the stock market despite low interest rates on bank accounts and certificates of deposit. Although that provided Golden West and other institutions a cheap source of funds to lend, the rate of return on loans -- Golden West specializes in mortgages that adjust monthly -- came down as well.
The difference between the yield Golden West earned on loans and other assets and the rate it paid on savings and borrowings averaged 2.97%, compared with the all-time high of 3.12% set one year ago, Golden West Chairman Herbert M. Sandler said.
Seriously delinquent and restructured loans totaled just 0.62% of Golden West's assets March 31, down from 0.72% one year earlier. The industry generally considers a 1% ratio a benchmark for solid performance. Golden West's provision for losses on loans dropped more than 30% from a year earlier, to $4.5 million.