Five of the largest bank holding companies reported double-digit gains
Some that announced Tuesday benefited from recent megamergers and the
Chase Manhattan Corp. jumped 62%, to $1.17 billion, bolstered by growth
At Bank One Corp., which bought First Chicago NBD Corp. in October,
Wells Fargo & Co., the result of Norwest Corp.'s November purchase of
Mellon Bank Corp.'s earnings were up 23%, to $254 million, and State
"It's a pretty good showing in bankland," said David Berry, director of
"Market-driven revenues are helping," said Diana Yates, an analyst at
As these major banking companies continued the generally favorable
"They had a wonderful quarter," said Lawrence Cohn, an analyst at Ryan,
For its part, New York-based Chase said strong growth across its three
The share prices of the companies closed as follows: Chase $83, down $2;
Chase, the nation's third-largest banking company, reported earnings per
In the first quarter last year, Chase took a $521 million pretax
Ms. Dublon said the performance "reflects the demonstrated strength of
Analysts said they had been looking for a strong quarter from the New
Favorable market conditions, double-digit revenue growth, progress on
Chase's noninterest revenues jumped 20%, to $2.9 billion.
Revenues from wholesale banking activities rose 8%, to $2.59 billion,
Trading revenue, including interest income, rose 21%, to $837 million.
Chase also reported an 88% gain from the sale of securities during the
Investment banking fees declined 12%, to $317 million, because of the
Revenues from consumer banking activities rose 12%, to $2.16 billion,
Chase's home finance unit had a 13% gain in revenues, to $272 million.
Revenues from credit card operations rose 8%, to $1 billion. Trust and
Global processing services, another Chase unit, had a 9% increase in
Overall expenses rose 12%, to $2.9 billion, because of higher employee
Bank One Corp.
Operating income, excluding merger-related charges and gains on the sale
Earnings per share of 88 cents met analysts' estimates, but that did not
The nation's fourth-largest bank, with $250 billion of assets, took
The company also had a pretax gain of $111 million related to the sale
Noninterest income grew 35% in the first quarter, including gains on
Market-driven revenue, which includes trading, equity, and investment
Fiduciary and investment management fees were $179 million, a 10%
Noninterest expense was $2.9 billion, a 21% jump. Excluding merger
Quarterly net interest income was $2.28 billion, flat compared with the
Robert A. Rosholt, Bank One's chief financial officer, said the company
Bank One has taken merger charges of $939 million in the past two
"The composition of earnings looked a little bit weak to me," said
Though a number of companies were beating estimates with market
Investors, Ms. Murray said, must "ask questions about strength in the
Ms. Murray said Bank One appeared to be on track with its merger
Ms. Yates of A.G. Edwards, said expense control at the company was
Wells Fargo & Co.
San Francisco-based Wells beat analysts' per share estimate of 50 cents
In its first full quarter after the Norwest deal, the $201 billion-asset
However, some areas, such as wholesale banking and consumer finance,
In an interview Tuesday, president and chief executive officer Richard
"We always believe there are businesses that are doing well and those
Net income from wholesale banking, which includes corporate lending,
Wells Fargo found it difficult to compete with other lenders more
Norwest Financial, the consumer and auto finance arm, also showed
But the lack of progress in commercial lending was more than offset by
The strength in community banking, which includes Wells Fargo's 2,866
"The old Wells was pretty soft a year ago," said James R. Bradshaw, an
Mr. Kovacevich attributed much of the growth in community banking to
Revenue-generating initiatives undertaken in the old Norwest retail bank
"Our revenue is growing much faster than our expenses, and much of that
Analysts pointed to average core deposits, which grew by $323 million to
"This was an excellent quarter that beat a lot of expectations," said R.
Mr. Kovacevich said he expects financial results from the second quarter
"Barring major changes in the economy, the pattern will be similar," he
Mellon Bank Corp.
Excluding one-time gains from sales of businesses, Pittsburgh-based
Like Bank One, Mellon booked revenue from the sale of Electronic Payment
Mellon, which gets 68% of revenues from fee-based businesses such as
"The trust and investment business had very strong growth," Martin G.
The quarter, he added, "shows that we have some very strong momentum."
Investment management income, which includes mutual funds and asset
Net interest income was $369 million, a 1% gain. Operating expenses of
"Revenue growth appears to be impressive, driven by continued growth in
State Street Corp.
At Boston-based State Street, earnings per share of 74 cents beat the
The $49.7 billion-asset company, which specializes in processing, trust,
Fee revenue rose 19%, to $552 million, and made up 74% of all revenues.
Revenues from foreign exchange trading jumped 25%, to $94 million. Fees
A assets under administration surpassed the $5 trillion mark at
Wells Fargo & Co.
San Francisco
Dollar amounts in millions (except per share)
Net income $884.0 $0684.0
Per share 0.53 0.41
ROA 1.80% 1.51%
ROE 17.33% 14.20%
Net interest margin 5.58% 5.87%
Net interest income 2,281.0 2,210.0
Noninterest income 1,727.0 1,533.0
Noninterest expense 2,342.0 2,296.0
Loss provision 270.0 305.0
Net chargeoffs 273.0 310.0
Balance Sheet 3/31/99 3/31/98
Assets $201,430.0 $190,853.0
Deposits 132,340.0 130,148.0
Loans 104,947.0 102,075.0
Reserve/nonp. loans 449% 431%
Nonperf. loans/loans 0.67% 0.70%
Nonperf. assets/assets 0.46% 0.49%
Nonperf. assets/loans + OREO 0.87% 0.91%
Leverage cap. ratio 6.75% 6.74%
Tier 1 cap. ratio 8.30% 8.19%
Tier 1+2 cap. ratio 11.05% 11.15%
State Street Corp.
Mellon Bank Corp.
Pittsburgh
Dollar amounts in millions (except per share)
Net income $254.0 $206.0
Per share 0.96 0.78
ROA 2.03% 1.89%
ROE 23.05% 21.60%
Net interest margin 3.78% 4.06%
Net interest income 371.0 367.0
Noninterest income 872.0 698.0
Noninterest expense 780.0 716.0
Loss provision 15.0 15.0
Net chargeoffs 17.0 18.0
Balance Sheet 3/31/99 3/31/98
Assets $49,384.0 $47,414.0
Deposits 33,348.0 33,096.0
Loans 30,554.0 30,343.0
Reserve/nonp. loans 323% 349%
Nonperf. loans/loans 0.41% 0.47%
Nonperf. assets/assets 0.33% 0.40%
Nonperf. assets/loans + OREO 0.53% 0.63%
Leverage cap. ratio 6.60%* 7.04%
Tier 1 cap. ratio 6.80%* 6.80%
Tier 1+2 cap. ratio 11.10%* 11.28%
*Estimated
Chase Manhattan Corp.
New York
Dollar amounts in millions (except per share)
Net income $1,173.0 $725.0
Per share 1.32 0.80
ROA 1.30% 0.78%
ROE 20.60% 13.80%
Net interest margin 3.08% 2.92%
Net interest income 2,208.0 2,169.0
Noninterest income 2,940.0 2,459.0
Noninterest expense 2,945.0 3,141.0
Loss provision 381.0 332.0
Net chargeoffs 380.0 344.0
Balance Sheet 3/31/99 3/31/98
Assets $361,258.0 $365,715.0
Deposits 207,641.0 196,096.0
Loans 169,297.0 164,322.0
Reserve/nonp. loans 234% 311%
Nonperf. loans/loans 0.88% 0.69%
Nonperf. assets/assets 0.46% 0.37%
Nonperf. assets/loans + OREO 0.83% 0.66%
Leverage cap. ratio 6.60%* 6.00%
Tier 1 cap. ratio 8.40%* 8.10%
Tier 1+2 cap. ratio 12.20%* 11.90%
* Estimated
Bank One Corp.
Chicago
Dollar amounts in millions (except per share)
Net income $1,151.0 $933.0
Per share 0.96 0.78
ROA 1.85% 1.59%
ROE 22.90% 20.30%
Net interest margin 4.30% 4.54%
Net interest income 2,309.0 2,320.0
Noninterest income 2,590.0 1,196.0
Noninterest expense 2,941.0 2,431.0
Loss provision 281.0 391.0
Net chargeoffs 281.0 414.0
Balance Sheet 3/31/99 3/31/98
Assets $250,402.0 $240,560.0
Deposits 153,699.0 153,817.0
Loans 154,850.0 158,387.0
Reserve/nonp. loans 220% 385%
Nonperf. loans/loans 0.67% 0.46%
Nonperf. assets/assets 0.45% 0.50%
Nonperf. assets/loans + OREO 0.74% 0.33%
Leverage cap. ratio 8.00% 7.90%
Tier 1 cap. ratio 8.10% 8.30%
Tier 1+2 cap. ratio 11.60% 12.50%
Wells Fargo & Co.
State Street Corp.
Boston
Dollar amounts in millions (except per share)
Net income $121.0 $106.0
Per share 0.74 0.64
ROA 0.96% 1.07%
ROE 20.80% 21.00%
Net interest margin 1.76% 2.09%
Net interest income 194.0 176.0
Noninterest income 552.0 463.0
Noninterest expense 557.0 474.0
Loss provision 4.0 5.0
Net chargeoffs 3.0 (1.0)
Balance Sheet 3/31/99 3/31/98
Assets $49,750.0 $39,010.0
Deposits 28,065.0 23,593.0
Loans 6,244.0 5,591.0
Reserve/nonp. loans 424% 6493%
Nonperf. loans/loans 0.32% 0.02%
Nonperf. assets/assets 0.05% 0.01%
Nonperf. assets/loans + OREO 0.37% 0.06%
Leverage cap. ratio 5.50% 5.90%
Tier 1 cap. ratio 14.40% 13.60%
Tier 1+2 cap. ratio 14.60% 13.70%