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Downey Financial reports Q1 net loss

Downey Financial has reported a net loss of $247.7 million or $8.89 per share on a diluted basis for the first quarter of 2008 compared to a net income of $42.9 million or $1.54 per share in the same quarter in 2007.

Net interest income totaled $83.7 million in the quarter, down $41.4 million or 33.1% from a year ago, reflecting a $2.513 billion or 16.5% decline in average interest-earning assets to $12.744 billion and a decline in the effective interest rate spread.

Operating expense totaled $89 million in the current quarter, up $23.3 million or 35.6% from the operating expense recorded during the same quarter of 2007.

At March 31, 2008, assets totaled $13.131 billion, down $2.107 billion or 13.8% from a year ago. Loan originations amounted to $676 million in the current quarter, a decrease of $585 million or 46.4% from $1.26 billion for the corresponding quarter in 2007.

Rick McGill, president of Downey Financial, said: As borrowers across the country continue to be adversely impacted by the ongoing weakening of the housing market, we remain focused on keeping our borrowers in their homes and avoiding foreclosures whenever possible.