Consolidations at top 100 banks catapult assets to $2.6 trillion.

The pace of consolidation in the banking industry accelerated sharply in the first half of 1993, according to an American Banker survey.

In just six months, the 100 largest U.S. bank holding companies boosted their total assets by a whopping $124 billion, or 5%, to $2.6 trillion. That far surpasses the $115 billion gain posted by the 100 largest banks for all of 1992.

As of mid-year, the top 100 bank companies' dominance of the market, as measured by share of total assets, increased to 73.05% from 70.82% six months earlier.

Thrift Purchases Help

Mergers accounted for half of the gains, as 19 of the top 100 banks completed takeovers in the first half. They purchased 16 banking companies with $44.4 billion of assets and 14 thrifts with $14.4 billion of assets.

The thrift purchases helped boost total banking industry assets to $3.57 trillion from $3.51 trillion six months earlier.

The merger wave has extended into 1993's second half, despite rising buyout prices.

Riggs an Exception

The purchases reflect a period of fundamental improvement in bank earnings. The top 100 companies cumulatively netted $14.7 billion during 1993's first half - a 54.3% increase over year-ago results. The banks' average Tier 1 capital ratios climbed to 10.45% from 9.43% during the 12-month period.

The lone exception to the relatively rosy picture among the nation's biggest bank companies is Riggs National Corp. in Washington, D.C. The company, which has $5 billion of assets, lost $100.8 million in the first half.

Its leverage ratio on June 30 was 2.85%, making it the only large bank to be classified by federal regulators as "significantly undercapitalized."

Commercial Loan Impact

Indeed, 97 of the 100 largest bank companies received the highest possible regulatory capital ranking at midyear. The exceptions, in addition to Riggs, were Citicorp, which remains the nation's largest bank company, and Canadian Imperial Holdings. The New York-based companies were classified as "adequately capitalized," the second highest ranking accorded by federal regulators.

The U.S. holding company of Canadian Imperial Bank of Commerce was dragged down in the risk ratings by a high concentration of commercial loans.

As measured by another regulatory yardstick -- leverage capital -- Canadian Imperial's U.S. banking unit boasted a hefty 12% ratio, far in excess of the 7.1% average for the 100 largest banking companies.

Total Capital Soars

Citicorp's leverage ratio climbed to 5.52% from 4.29% one year earlier, reflecting its improved capital and core earnings strengths. Its total capital climbed to 10.31% from 8.5% of risk-adjusted assets while its first-half profits, excluding accounting changes and extraordinary items, soared by 150%

Despite the rapid rise in assets, deposit growth at the 100 largest banking companies was a pallid $29 billion, reflecting deposit runoffs as a result of the low-rate interest environments.

On the other hand, banks have been taking advantage of low rates to help fund their growing assets through spate of capital-raising in the public markets.

The 100 largest banks held $1.79 trillion of deposits at mid-year That represented 66.64% of the industry's total according to the survey, up from 65.1% at Dec. 31, 1992.

At midyear, the largest banks held $2.36 million of assets for each employee, up from $2.32 million six months ago and $2.16 million two years ago. [TABULAR DATA OMITTED]

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