Downey Announces Second Quarter 2008 Results

NEWPORT BEACH, Calif., July 24 /PRNewswire-FirstCall/ -- Downey Financial Corp. (NYSE: DSL) reported a net loss for second quarter 2008 of $218.9 million or $7.86 per share on a diluted basis, compared with net income of $32.7 million or $1.17 on a diluted basis per share in the year-ago second quarter. The $309.5 million unfavorable change in pre-tax income/(loss) between second quarters was due primarily to: -- A $249.4 million increase in the provision for credit losses; -- A $28.5 million or 25.6% decline in net interest income due to a lower level of interest-earning assets and a lower effective interest rate spread; -- A $26.2 million increase in operating expense primarily due to higher costs related to the operation of real estate acquired in settlement of loans; and -- A $5.2 million unfavorable change in income from... [read full story]