Benefiting from a year of aggressive acquisition activity, NationsBank Corp. said Monday it earned $818 million in the fourth quarter, up 29% over the same period in 1996.
Last year the Charlotte, N.C.-based company completed two major deals, purchasing Boatmen's Bancshares, St. Louis, and San Francisco regional brokerage Montgomery Securities Inc.
"The integration of Boatmen's and Montgomery Securities has added new dimensions to our company's market power and ability to compete in the financial sector," said NationsBank chief executive officer Hugh L. McColl Jr.
The company's biggest deal to date and one of the largest in banking history, the $14.6 billion purchase of Barnett Banks Inc., closed last week.
NationsBank plans to release a brief summary of Barnett's fourth-quarter results this month.
In a disclosure that did not affect 1997 results but will slash 1998 estimates, NationsBank also said the $450 million in Barnett-related cost- cutting projected for this year will be closer to $300 million.
The company said it decided to integrate Barnett's sales systems at a slower pace than initially planned. It is still hoping to hit its projections of $915 million in cost savings from the deal by yearend 1999, officials said.
For NationsBank, which had $265 billion of assets at yearend, fourth- quarter earnings totaled $1.12 per share, a penny better than consensus estimates.
For the year, net income totaled $3.08 billion, a 29.4% jump from 1996, when earnings were affected by a $77 million after-tax merger-related charge. Earnings per share totaled $4.17 for the year, just above consensus estimates of $4.16.
NationsBank said its noninterest income gains were significant for the year, with fees growing 37% from 1996, to $5 billion. The increase was driven by gains in all major categories, officials said.
A decline in problem assets also helped profits. According to the company, total nonperforming assets on Dec. 31 were $1.14 billion , or 0.43% of total assets, compared with $1.04 billion, or 0.56% of total assets, at yearend 1996. Net chargeoffs for the year were $798 million, or 0.54% of average net loans, leases, and factored receivables, compared with 0.48% in 1996.
For the quarter, fee income rose 57%, to $1.5 billion, thanks to higher income from investment banking, deposit accounts, and brokerage. Montgomery alone kicked in $200 million in fees during the period while adding $170 million in expenses, according to NationsBank officials,
"It was a solid quarter," said Nancy Bush, an analyst at Brown Brothers, Harriman & Co. Ms. Bush said the company appeared to be ahead of schedule in terms of reaping the benefits of the Boatmen's acquisition. Yet she noted: "The really maddening thing about (NationsBank) is that at the core they do things very well, but it's largely obscured by all of the acquisition activity."
Total revenue was up 67% in the quarter for general bank operations, while global finance saw a 27% increase and the financial services division realized a 6% gain from the same period last year, NationsBank said.
Meanwhile, SouthTrust Corp. of Birmingham, Ala., reported fourth-quarter earnings of $82 million Monday, up 20% from the same period in 1996.
The $31 billion-asset company said its earnings per share equaled 80 cents, a penny better than consensus estimates.
For the year, SouthTrust earned $306.7 million, up 20% from 1996. Earnings per share for 1997 totaled $3.05, in line with consensus estimates.
Total revenues for 1997 increased 21% from 1996, while total assets grew 18%. Loans increased 16%, to $22.5 billion, while deposits increased 13%, to $19.6 billion.
Separately, First Empire State Corp. of Buffalo said its fourth- quarter profits rose 15%, to $46.3 million.
The $14 billion-asset First Empire credited the gain to increased revenues from mortgage banking, brokerage, and trust services.
Noninterest income totaled $53 million in the quarter, up 10%. Revenues from mortgage banking grew 16%, to $14.6 million; revenues from sales of mutual funds and annuities grew 5%, to $3.9 million; and revenues from trust services grew 15%, to $8.9 million.
Expenses rose 3%, to $110.7 million.
For the year, First Empire's net income rose 17%, to $176.2 million. Average loans grew 8.5%, to $11 billion. The bank said strong loan growth made up for a compression in the net interest margin, which was 4.38%, compared with 4.45% in 1996.
First Empire also said its $873 million purchase of Onbancorp in Syracuse should close by the end of the first quarter. +++
First Empire State Corp. Buffalo, N.Y. Dollar amounts in millions (except per share) Fourth Quarter 4Q97 4Q96 Net income $46.3 $40.4 Per share 6.66 5.70 ROA 1.33% 1.26% ROE 18.25% 18.05% Net interest margin 4.33% 4.46% Net interest income 142.3 136.6 Noninterest income 53.0 47.6 Noninterest expense 110.7 107.1 Year to Date 1997 1996 Net income $176.2 $151.1 Per share 25.26 21.08 ROA 1.32% 1.21% ROE 18.49% 17.60% Balance Sheet 12/31/97 12/31/96 Assets $14,002.9 $12,943.9 Deposits 11,163.2 10,514.5 Loans 11,496.6 10,722.1
NationsBank Corp. Charlotte, N.C. Dollar amounts in millions (except per share) Fourth Quarter 4Q97 4Q96 Net income $818.0 $632.0 Per share 1.12 1.07 ROA 1.28% 1.29% ROE 15.93% 19.06% Net interest margin 3.68% 3.75% Net interest income 1,988.0 1,590.0 Noninterest income 1,500.0 958.0 Noninterest expense 2,051.0 1,466.0 Loss provision 230.0 150.0 Net chargeoffs 231.0 151.0 Year to Date 1997 1996 Net income $3,077.0 $2,375.0 Per share 4.17 3.92 ROA 1.26% 1.18% ROE 15.26% 17.95% Net interest margin 3.79% 3.62% Net interest income 7,898.0 6,329.0 Noninterest income 5,002.0 3,646.0 Noninterest expense 7,447.0 5,783.0 Loss provision 800.0 605.0 Net chargeoffs 798.0 598.0 Balance Sheet 12/31/97 12/31/96 Assets $264,562.0 $185,794.0 Deposits 138,194.0 106,498.0 Loans 142,718.0 121,583.0 Reserve/nonp. loans 273% 260% Nonperf. loans/loans 0.71% 0.73% Nonperf. assets/assets 0.43% 0.56% Nonperf. assets/loans + OREO 0.79% 0.85% Leverage cap. ratio 5.57% 7.09% Tier 1 cap. ratio 6.50% 7.76% Tier 1+2 cap. ratio 10.89% 12.66%
SouthTrust Corp. Birmingham, Ala. Dollar amounts in millions (except per share) Fourth Quarter 4Q97 4Q96 Net income $82.0 $68.4 Per share 0.80 0.71 ROA 1.09% 1.08% ROE 15.21% 16.02% Net interest margin 3.90% 4.03% Net interest income 276.1 238.8 Noninterest income 74.7 69.2 Noninterest expense 199.0 171.6 Year to Date 1997 1996 Net income $306.7 $254.7 Per share 3.05 2.69 ROA 1.08% 1.09% ROE 15.72% 15.92% Balance Sheet 12/31/97 12/31/96 Assets $30,906.4 $26,223.2 Deposits 19,586.6 17,305.5 Loans 22,474.8 19,331.1 ===
