Five of the largest banking companies in the Midwest reported strong third-quarter results on Thursday.
Norwest Corp. in Minneapolis drew on acquisitions and loan originations to deliver $167.3 million of earnings, up 26% from a year ago. Merger efficiencies and fee revenue gains helped Detroit-based NBD Bancorp post $125.2 million of earnings, up 15% from normalized results of a year ago.
Society Corp., based in Cleveland, took advantage of firming credit quality and modest loan growth to post net income of $98.2 million, up 18.6%. Minneapolis-based First Bank System Inc. boosted earnings 50.3% to $91.1 million, thanks to acquisitions and efficiency gains.
Tax breaks and venture capital and trading gains helped Chicago-based Continental Bank Corp. post $68 million of earnings, a 28% increase.
NORWEST
Despite acquisition-related loan growth, the Minneapolis-based company's net interest margin declined 11 basis points in the third quarter to 5.65%.
The company also suffered a decline in mortgage banking profits to $12.6 million, from $17.9 million in the second quarter and $23 million a year ago. Norwest said prior results were boosted by sales of mortgage servicing rights.
Norwest booked $21.4 million venture capital gains, up from $9.4 million a year ago. But it lost $800,000 on debt-security investments, compared with a $48.5 million in the third quarter of 1992.Norwest Corp. Minneapolis-- Dollar amounts in millions (except per share) --Third Quarter 3Q93 3Q92Net income $167.3 $132.7Per share 0.55 0.43ROA 1.38% 1.26%ROE 21.00% 18.20%Net interest margin 5.54% 5.61%Net interest income 602.7 530.4Noninterest income 367.1 350.4Noninterest expense 711.4 636.2Loss provision 23.0 43.3Net chargeoffs 30.6 54.5Year to Date 1993 1992Net income $478.6 $374.5Per share 1.56 1.22ROA 1.38% 1.18%ROE 20.70% 17.70%Net interest margin 5.64% 5.38%Net interest income 1,781.3 1,539.3Noninterest income 1,116.5 923.8Noninterest expense 2,090.4 1,775.8Loss provision 99.6 154.5Net chargeoffs 111.7 153.5Balance Sheet 9/30/93 9/30/92Assets $50,387.9 $43,278.0Deposits 31,555.9 27,197.7Loans 26,232.4 22,344.5Reserve/nonp. loans 331.70% 252.90%Nonperf loans/loans 0.87% 1.19%Nonperf asset/asset 0.59% 0.84%Leverage cap. ratio 6.81% 7.16%Tier 1 cap. ratio 9.80% 10.51%Tier 1+2 cap ratio 12.42% 13.77%
NBD BANCORP
The Michigan bank restated its 1992 results to reflect the pooling acquisitions of INB Financial Corp. and Summcorp, both of Indiana.
In this year's third quarter, the company enjoyed a widening net interest margin that largely accounted for a 2% rise in net interest income.
Noninterest income rose 6% from a year ago, fueled by gains in trust income, mortgage sales, data processing fees, and mutual fund and annuity fees.
SOCIETY CORP.
The Cleveland-based banking company, which plans to merge next year with Albany-based Keycorp, said it booked a $12.2 million after-tax gain on the sale of a former Texas subsidiary as well as $16.3 million from the sale of investment securities. That was offset in part by $21.1 million of after-tax charges for computer write-downs, facilities charges, and accounting changes.
Society's net interest margin fell ten basis points from this year's second quarter to 5.25% because of the maturation of certain securities investments and swap agreements.
Its loans grew by $263 million, or 1.54%, highlighted by consumer installment and mortgage loan demand.
Society's loss provision of $17 million was half its year-ago level, and it was smaller than the $21.1 million of net chargeoffs that it posted in the third quarter.Society Corp.Cleveland--Dollar amounts in million (except per share) --Third Quarter 3Q93 3Q92Net income $98.2 $82.8Per share 0.83 0.69ROA 1.55% 1.43%ROE 19.81% 19.03%Net interest margin 5.25% 5.51%Net interest income 299.6 288.0Noninterest income 170.9 120.6Noninterest expense 284.9 246.1Loss provision 17.0 33.9Net chargeoffs 21.1 45.3Year to Date 1993 1992Net income $290.1 $214.7Per share 2.44 1.79ROA 1.52% 1.21%ROE 20.32% 16.97%Net interest margin 5.31% 5.33%Net interest income 918.1 860.8Noninterest income 396.1 387.7Noninterest expense 790.5 798.8Loss provision 59.1 116.3Net chargeoffs 77.7 130.5Balance Sheet 9/30/93 9/30/92Assets $25,760.6 $24,388.9Deposits 17,765.0 17,327.2Loans 17,300.2 15,910.4Reserve/nonp. loans 242,80% 129.52%Nonperf loans/loans 1.15% 2.49%Nonperf asset/asset 1.18% 2.35%Leverage cap. ratio 7.34% 7.16%Tier 1 cap. ratio 8.52% 8.16%Tier 1+2 cap ratio 12.74% 11.15%
FIRST BANK SYSTEM
The Minneapolis-based company's year-earlier results were restated to reflect two pooling acquisitions.
First Bank said its net interest margin of 5.06% was down 11 basis points from the second quarter but up 23 basis points from a year ago. Seasonal loans to mortgage banking firms helped boost total loans by 604 million, or 3.36%, in the third quarter, the company said.
CONTINENTAL BANK
The Chicago-based company booked $40 million of trading gains, compared with $19 million a year ago. Equity investment gains of $60 million compared with $26 million a year ago.
Tax-loss carryforwards and the resolution of a tax court case enabled the company to book a $3 million tax credit for the quarter.
