Big Las Vegas bank operators report differing financial results

Thursday, Oct. 19, 2000 | 11:17 a.m.

SUN STAFF AND WIRE REPORTS

Washington Mutual Inc., the largest U.S. savings and loan and a new competitor in Las Vegas, on Tuesday said third-quarter profit fell 3.7 percent on higher costs.

Net income fell to $452.5 million, or 86 cents a share, from $470 million, or 83 cents, a year earlier. The company had 6.7 percent fewer shares from last year.

Seattle-based Washington Mutual said deposits and other retail banking fees rose 29 percent to a record $256.4 million helped by the introduction of free checking accounts. The bank last week said it hopes it will attract more new accounts by dropping ATM surcharges in California, a hot-button issue with consumers.

The savings and loan also made 12 percent more single-family residential loans. The company, which has been expanding into Las Vegas with branches replete with concierge desks, toy bubble gum machines and children play areas, said non-interest expenses climbed 12 percent.

The savings and loan will become the nation's third-largest mortgage lender and fourth-biggest servicer of residential mortgages after it completes its acquisition of PNC Financial Services Group's mortgage unit.

Net interest income, the difference between what it pays to depositors and earns from lending money, declined 8 percent to $1.03 billion. The net interest margin was 2.19 percent, down from 2.50 percent last year.

The provision for loan losses rose to $47.6 million from $40.8 million.

Non-interest income jumped 38 percent to $510.9 million, mostly because of deposit and retail banking and loan servicing fees at the $188 billion in assets Washington Mutual.

Another Las Vegas bank operator, Golden State Bancorp of San Francisco, said it earned $88.5 million or 62 cents per share in the third quarter, up from $81.6 million or 58 cents in the year-ago quarter.

Golden State, with $60.6 billion in assets, operates as California Federal Bank. Cal Fed has 354 branches in California and Nevada.

Colonial BancGroup Inc. of Montgomery, Ala., which also operates in Nevada, reported quarterly net income of $28.6 million or 26 cents per share, down from $30.4 million or 27 cents in the 1999 quarter.

Operating income, however, increased 8 percent in the quarter for Colonial.

Finally, community bank Valley Bank of Henderson said it earned $241,000 in the quarter ended Sept. 30 vs. a loss of $67,000 in the year-ago quarter. The two-year-old bank's assets now exceed $70 million and with the recent sale of $3.6 million in additional stock, capital and reserves exceed $10.7 million, Valley Bank said.