QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED

Delaware
(State or other jurisdiction of
incorporation or organization)

33-0633413
(I.R.S. Employer Identification No.)

3501 Jamboree Road, Newport Beach, CA
(Address of principal executive office)

92660
(Zip Code)

Registrant’s telephone number, including area code

(949) 854-0300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, $0.01 Par Value

Name of each exchange
on which registered
New York Stock Exchange
Pacific Exchange

PART I

ITEM 1. –

FINANCIAL INFORMATION           

1

Consolidated Balance Sheets          

1

Consolidated Statements of Income           

2

Consolidated Statements of Comprehensive Income          

3

Consolidated Statements of Cash Flows           

4

Notes To Consolidated Financial Statements           

6

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS           

15

ITEM 3. –

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK           

46

ITEM 4. –

CONTROLS AND PROCEDURES           

46

PART II

ITEM 1. –

LEGAL PROCEEDINGS           

47

ITEM 2. –

CHANGES IN SECURITIES AND USE OF PROCEEDS           

47

ITEM 3. –

DEFAULTS UPON SENIOR SECURITIES           

47

ITEM 4. –

SUBMISSION OF MATTERS TO A VOTE OF SECURITIY HOLDERS           

47

ITEM 5. –

OTHER INFORMATION           

47

ITEM 6. –

EXHIBITS AND REPORTS ON FORM 8-K           

47

AVAILABILITY OF REPORTS           

49

SIGNATURES           

49

September 30,

December 31,

September 30,

(Dollars in Thousands, Except Per Share Data)

2003

2002

2002

Assets

Cash

$

113,075

$

123,524

$

135,493

Federal funds

4,001

2,555

16,702

Cash and cash equivalents

117,076

126,079

152,195

U.S. Treasury securities, agency obligations and other investment

securities available for sale, at fair value

635,825

457,864

267,310

Municipal securities held to maturity, at amortized cost (estimated

fair value of $6,135 at December 31, 2002,

and $6,305 at September 30, 2002)

-

6,149

6,320

Loans held for sale, at lower of cost or fair value

335,437

652,052

665,587

Mortgage-backed securities available for sale, at fair value

1,590

2,253

1,019,030

Loans receivable held for investment

9,650,441

10,322,637

10,000,420

Investments in real estate and joint ventures

32,435

33,890

40,371

Real estate acquired in settlement of loans

7,436

12,360

15,441

Premises and equipment

111,201

113,536

113,258

Federal Home Loan Bank stock, at cost

121,813

117,563

116,041

Mortgage servicing rights, net

70,400

57,729

46,912

Other assets

75,713

76,039

75,533

$

11,159,367

$

11,978,151

$

12,518,418

Liabilities and Stockholders’ Equity

Deposits

$

8,608,068

$

9,238,350

$

9,056,932

Federal Home Loan Bank advances and other borrowings

1,263,328

1,624,084

1,869,789

Company obligated mandatorily redeemable capital securities of

subsidiary trust holding solely junior subordinated debentures

of the Company ("Capital Securities")

120,000

120,000

120,000

Accounts payable and accrued liabilities

180,869

102,533

618,210

Deferred income taxes

92,892

70,080

62,680

Total liabilities

10,265,157

11,155,047

11,727,611

Stockholders’ equity:

Preferred stock, par value of $0.01 per share; authorized 5,000,000

shares; outstanding none

-

-

-

Common stock, par value of $0.01 per share; authorized 50,000,000

shares; issued 28,235,022 shares at September 30, 2003,

December 31, 2002 and September 30, 2002

282

282

282

Additional paid-in capital

93,792

93,792

93,792

Accumulated other comprehensive income (loss)

(757

)

(1,422

)

274

Retained earnings

813,063

742,622

705,172

Treasury stock, at cost, 306,300 shares at September 30, 2003 and

December 31, 2002 and 212,300 shares at September 30, 2002

(12,170

)

(12,170

)

(8,713

)

Total stockholders’ equity

894,210

823,104

790,807

$

11,159,367

$

11,978,151

$

12,518,418

Three Months Ended

Nine Months Ended

September 30,

September 30,

(Dollars in Thousands, Except Per Share Data)

2003

2002

2003

2002

Interest income

Loans receivable

$

119,990

$

150,987

$

393,363

$

459,712

U.S. Treasury securities and agency obligations

2,497

2,190

7,520

7,386

Mortgage-backed securities

16

287

51

2,503

Other investments

1,196

1,460

4,336

5,146

Total interest income

123,699

154,924

405,270

474,747

Interest expense

Deposits

38,010

59,598

128,229

188,354

Borrowings

14,304

15,314

44,280

45,226

Capital securities

3,040

3,040

9,122

9,122

Total interest expense

55,354

77,952

181,631

242,702

Net interest income

68,345

76,972

223,639

232,045

Provision for (reduction of) loan losses

(1,104

)

471

(3,437

)

812

Net interest income after provision for (reduction of) loan losses

69,449

76,501

227,076

231,233

Other income, net

Loan and deposit related fees

14,405

11,848

40,032

34,762

Real estate and joint ventures held for investment, net

5,864

2,407

8,876

6,420

Secondary marketing activities:

Loan servicing income (loss), net

1,550

(18,963

)

(33,828

)

(35,168

)

Net gains (losses) on sales of loans and mortgage-backed securities

23,467

(971

)

55,882

22,126

Net gains on sales of mortgage servicing rights

-

-

23

306

Net losses on trading securities

(11,040

)

-

(10,449

)

-

Net gains on sales of investment securities

-

-

8

209

Litigation award

-

-

2,717

-

Other

(747

)

913

584

2,034

Total other income (loss), net

33,499

(4,766

)

63,845

30,689

Operating expense

Salaries and related costs

34,312

29,067

101,466

86,819

Premises and equipment costs

8,291

7,916

23,975

22,803

Advertising expense

835

1,066

2,644

3,692

SAIF insurance premiums and regulatory assessments

787

765

2,443

2,313

Professional fees

798

91

1,844

888

Other general and administrative expense

7,718

7,474

23,722

20,035

Total general and administrative expense

52,741

46,379

156,094

136,550

Net operation of real estate acquired in settlement of loans

(376

)

110

(190

)

79

Total operating expense

52,365

46,489

155,904

136,629

Income before income taxes

50,583

25,246

135,017

125,293

Income taxes

21,332

10,678

57,034

52,972

Net income

$

29,251

$

14,568

$

77,983

$

72,321

PER SHARE INFORMATION

Basic

$

1.05

$

0.52

$

2.79

$

2.56

Diluted

$

1.05

$

0.52

$

2.79

$

2.56

Cash dividends declared and paid

$

0.09

$

0.09

$

0.27

$

0.27

Weighted average diluted shares outstanding

27,963,374

28,132,199

27,962,012

28,229,288

Three Months Ended

Nine Months Ended

September 30,

September 30,

(In Thousands)

2003

2002

2003

2002

Net income

$

29,251

$

14,568

$

77,983

$

72,321

Other comprehensive income (loss), net of income taxes (benefits)

Unrealized gains (losses) on securities available for sale:

U.S. Treasury securities, agency obligations and other investment

securities available for sale, at fair value

536

104

(103

)

(441

)

Mortgage-backed securities available for sale, at fair value

(4

)

774

(16

)

1,698

Less reclassification of realized gains included in net income

-

-

(5

)

(121

)

Unrealized gains (losses) on cash flow hedges:

Net derivative instruments

8,786

(3,383

)

1,051

(7,008

)

Less reclassification of realized (gains) losses included in net income

(11,210

)

2,543

(262

)

6,385

Total other comprehensive income (loss), net of income taxes (benefits)

(1,892

)

38

665

513

Comprehensive income

$

27,359

$

14,606

$

78,648

$

72,834

Nine Months Ended

September 30,

(In Thousands)

2003

2002

Cash flows from operating activities

Net income

$

77,983

$

72,321

Adjustments to reconcile net income to net cash used for operating activities:

Depreciation and amortization

65,989

44,966

Provision for losses on loans, real estate acquired in settlement of loans, investments

in real estate and joint ventures, mortgage servicing rights and other assets

16,979

34,912

Net gains on sales of loans and mortgage-backed securities, mortgage servicing rights,

trading and investment securities, real estate and other assets

(62,866

)

(27,677

)

Interest capitalized on loans (negative amortization)

(7,284

)

(20,917

)

Federal Home Loan Bank stock dividends

(4,250

)

(2,902

)

Loans originated for sale

(5,334,724

)

(4,131,463

)

Proceeds from sales of loans held for sale, including those sold

as mortgage-backed securities

5,673,264

4,036,188

(Increase) decrease in other, net

(61,914

)

19,854

Net cash provided by operating activities

363,177

25,282

Cash flows from investing activities

Proceeds from sales of:

U.S. Treasury securities, agency obligations and other investment securities

available for sale

15,275

88,541

Wholly owned real estate and real estate acquired in settlement of loans

21,327

26,036

Proceeds from maturities of U.S. Treasury securities, agency obligations

and other investment securities available for sale

558,474

426,205

Purchase of:

U.S. Treasury securities, agency obligations and other investment securities

available for sale

(645,822

)

(381,730

)

Mortgage-backed securities available for sale

-

(503,874

)

Loans receivable held for investment

(694,719

)

(31,204

)

Premises and equipment

(11,870

)

(15,878

)

Originations of loans receivable held for investment (net of refinances of $254,283 for the

nine months ended September 30, 2003 and $216,540 for the nine months ended

September 30, 2002)

(2,359,137

)

(3,088,235

)

Principal payments on l