Higher loan volume offset a narrowing lending spread and lifted
third-quarter earnings 22% from a year ago.
The Seattle-based mortgage lender earned $821 million, or 92 cents a share, in the quarter, compared with $674 million, or 76 cents a share, a year ago. The results were 2 cents ahead of the Thomson First Call consensus estimate.
In its big lending division, Washington Mutual recorded net interest income of $1.92 billion, up 10% from a year ago. The company saw its main measure of loan profitability, the net interest margin, narrow to 2.61% in the quarter from 2.77%, but saw interest earnings assets shoot up 18% from a year ago.
WaMu also benefited from higher non-interest income, primarily reflecting a higher volume of sales of home mortgage loans and mortgage-backed securities. Non-interest income was $1.37 billion in the quarter, up from $1.26 billion a year ago.
The company looked OK on the credit-quality front. At Sept. 30, nonperforming assets as a percentage of total assets were 0.52%, down from 0.53% at the end of the second quarter and 0.61% a year ago. The company's bad-debt provision of $52 million included a $32 million special provision related to Hurricane Katrina.
The company also bumped up its quarterly dividend by a penny to 49 cents. The shares were unchanged at $37.90 on Instinet.