Golden West reports record earnings
By MortgageDaily.com staff
10/21/2002

Golden West Financial Corp. reported an increase in third quarter loan originations compared with last year. However, the third quarter figure is a slight decrease from second quarter 2002.

The Oakland, Calif.-based company announced $6.7 billion in originations during the third quarter. This represents an almost 20% increase from last year's $5.6 billion, but an almost 3% decrease from this year's second quarter.

Golden West, the parent company of World Savings Bank, said year-to-date (YTD) production of $19 billion beat last year's record $15 billion YTD by almost 27%.

"Our loan balances grew by 14% during the past 12 months," said Herbert M. Sandler, chairman and chief executive officer. "Over the long run, the expansion of the mortgage portfolio, our major earning asset, is a principal factor behind the growth of Golden West's profits."

Demand for residential mortgages remained strong during the third quarter, he said.

"Despite the fact that rates on traditional fixed loans were at 40 year lows, the cost of adjustable rate mortgages (ARMs), our primary product, was even lower, enabling our loan origination staff to produce record volume."

ARMs composed 93% of Golden West's originations during both the third quarter and first nine months of 2002, the report said.

The company's repayments totaled $3.7 billion during the third quarter, down from $4.2 billion during the same time last year, the report said.

"With loan origination up and repayments down, our earning assets grew by $3 billion in the third quarter of 2002, compared with a $720 million expansion a year ago," Sandler said.

Earnings during the third quarter were a record $244.5 million at Golden West.

Shares of Golden West closed Friday at $68.69, up 42 cents, according to the Wall Street Journal.

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