Washington Mutual, the largest U.S. savings and loan, on Tuesday said its first-quarter home-lending income fell nearly tenfold, to $38 million, compared with $323 million during the same period last year.

Growth in WaMu’s credit card operations helped save the day, propelling first-quarter profit for the savings and loan 9 percent.

“The slowing housing market contributed to the decline in gain on sale of loans compared with the prior quarter and last year’s first quarter,” the company said in a statement.

Net income for the Seattle-based company rose to $985 million, or 98 cents per share, from $902 million, or $1.01 per share, a year earlier.

Profit per share fell because Washington Mutual had more shares outstanding than a year earlier.

The company benefited from the thrift’s acquisition of credit card issuer Providian Financial Corp. last October. Washington Mutual said it opened 256,000 retail credit card accounts in the quarter, giving it 417,000 since October.

This helped offset pressure from a narrowing of the bank’s net interest margin, which fell to 2.75 percent from 2.88 percent at year end, and 2.83 percent a year earlier.

Many banks have been unable to pass on their higher borrowing costs from rising short-term interest rates, because long-term rates have not risen similarly.

Reporting on the performance of its home loans group, the bank said “the increase in short-term interest rates and the flat yield curve, in conjunction with a smaller portfolio of loans outstanding, contributed to the 35 percent decline in net interest income on a linked quarter basis.”

The company also said, “Efficiency initiatives reduce expenses,” citing WaMu’s decision to consolidate 26 processing offices and lay off about 2,500 workers.

Washington Mutual shares closed Tuesday at $44.46 on the New York Stock Exchange, up 49 cents.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×