Good loan growth, improved asset quality and lower expenses helped Barnett Banks Inc. boost its third quarter net income 11% over the year-earlier period, to $123.4 million.
Barnett's per-share income of $1.18 was right in line with Wall Street consensus estimates.
"It was a solid quarter, but not a blow, off-the-doors kind of quarter," said analyst Nancy Bush, with Brown Brothers Harriman & Co. in New York.
Meanwhile, Hibernia Corp., New Orleans, said it earned $23.2 million, up 64% from $14.1 million in the year-earlier quarter, largely because of improved asset quality and loan growth. Hibernia's 24 cents a share was one cent above consensus estimates.
Barnett's quartet was notable in that revenues were up for a second consecutive, period -- to $557.9 million from $553.7 million in the second quarter. Prior to this year's second quarter, Jacksonville-based Barnett had suffered five consecutive quarterly declines in revenue.
"It reflects the fact that Barnett's growth in earnings is back to normal," said Benjamin C. Bishop Jr., with Allen C. Ewing & Co. in Jacksonville.
On a year-to-year comparison. Barnett's net interest income was flat ($420 million compared to $422 million in the year-ago quarter) and noninterest income was actually down, by 9% during the period to $138 million.
The problem was the net interest margin, which slipped 5 basis points from the second quarter to 4.85% due to higher deposit costs and loan yields under pressure. Fortunately, this was substantially offset by loan growth, up 5% from the year-earlier period.
Barnett said consumer loans, which represent more than 70% of its portfolio, were up 7% while commercial loans did even better, gaining 12%. The 8% annualized rate for loan growth puts Barnett close to the 9% to 10% level reported by many of its peers.
Noninterest income suffered largely because Bamett sold off certain fee income-generating businesses last year, including student lending, bond administration, and correspondent data processing.
Lower mortgage. banking revenues -- coming with the end of the refinance boom -- also hurt, as did depressed mutual fund sales.
On the positive side; Barnett's loan-loss provision fell 35%, to $15.4 million, while net chargeoffs were-down 44%, also to $15.4 million.
Lower credit costs and stringent efforts to control overhead brought noninterest expense down by 8%, to $340.3 million.
Hibernia, which has $5.7 billion of assets, benefited from a $17.5 million negative loan-loss provision, which means that funds were taken from the reserve and restored to the bottom line. In 1993's third quarter, by contrast, Hibernia was forced to put $2.4 million into the reserve.
Hibernia also reported improved performance due to higher net interest income, produced by loan growth (up 23% on an annualized rate) and a stronger net interest margin.
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