CalFed, Golden State Report Earnings

California Federal Bank, San Francisco, has reported net income of $339.9 million (before preferred stock dividends) for the second quarter, up from $63.3 million a year ago.The results included a $250 million deferred tax benefit stemming from a reduction in the bank's valuation allowance related to its deferred tax asset. Without the adjustment, earnings would have totaled $89.9 million, up 42% from a year ago. "While margins have declined due to the increased runoff in the bank's mortgage loans and mortgage-backed securities, we were able to increase our balance of earning assets so that net interest income was only modestly lower than [in] comparable periods last year," said Gerald J. Ford, CalFed's chairman and CEO. CalFed's parent, First Nationwide (Parent) Holdings Inc., is expected to complete a merger with Golden State Bancorp Inc., Glendale, Calif., by the end of the third quarter. Golden State, the parent of Glendale Federal Bank, has reported earnings of $39.3 million for its fiscal fourth quarter (ended June 30), compared with $24.3 million a year ago.