SAN FRANCISCO -- In another positive report from California, BankAmerica Corp. reported third-quarter earnings of $547 million, up 12.6% from the same period a year ago. The result was in line with analysts' expectations.
BANKAMERICA San Francisco
Dollar amounts in millions (except per share)THIRD QUARTER 3Q94 3Q93Net income $547 $486Per share 1.36 1.19ROA 1.07% 1.04%ROE 12.17% 11.66%Net interest margin 4.51% 4.72%Net interest income 1,910 1,887Noninterest income 1,075 1.007Noninterest expense 1,938 1,848Loss provision 110 178Net chargeoffs 106 236YEAR TO DATE 1994 1993Net income $1,585 $1,458Per share 3.95 3.58ROA 1.07% 1.05%ROE 12.28% 12.11%Net interest margin 4.49% 4.71%Net interest income 5,547 5,592Noninterest income 3,096 3,154Noninterest expense 5,543 5,509Loss provision 360 653Net chargeoffs 434 903BALANCE SHEET 9/30/94 9/30/93Assets $214,230 $187,109Deposits 152,666 140,969Loans 138,691 125,976Reserve/nonp. loans 165.07% 91.64%Nonperf. loans/loans 1.58% 3.22%Nonperf. asset/asset 1.30% 2.49%Leverage cap. ratio 6.64% 6.42%Tier 1 cap. ratio 7.30% 7.19%Tier 1+2 cap. ratio 11.60% 11.60%
During the quarter, San Francisco-based BankAmerica earned $1.36 per share, compared with $1.19 in the same period last year. The showing extends the bank's breakout from the narrow earnings-per-share range in which it had been stuck for the past three years.
At the end of August, BankAmerica completed its acquisition of Chicago-based Continental Bank Corp. BankAmerica booked $50 million in nonrecurring charges related to the transaction.
In addition, the company issued 21.5 million shares of common stock, including 11.8 million shares repurchased on the market, to pay for the acquisition.
As measured by rates of return, asset growth related to Continental largely offset BankAmerica's net income gains. Total assets of $214.2 billion at the end of September were up 8.4% from the previous quarter. As a result, BankAmerica's return on assets for the quarter was 1.07%, just slightly above the 1.04% posted a year ago. Analysts said that despite its higher profits and the beginning of an economic recovery in its home state, the nation's second-largest bank company is still having trouble generating enough business volume.
"Overall the quarter was positive, but BankAmerica still has sluggish revenue growth," said Raphael Soifer, a bank analyst with Brown Brothers Harriman & Co. in New York.
The company's third-quarter net interest income was up $23 million from the same period of 1993. But $40 million of that gain came from Continental. Without the acquisition, net interest income would have dipped slightly.
BankAmerica is enjoying loan growth, marking a turnaround from recent periods. In the latest quarter, however, internally generated loans, as opposed to credits acquired from Continental, were up a scant 2% from a year ago.
Continuing the trend of the last several years, BankAmerica's loan-loss provision of $110 million was down 38.2% from the 1993 third quarter.
Meanwhile, Bancorp Hawaii earned $32 million in the third quarter, up 6% from the comparable period a year ago. Hawaii's largest bank company recorded the gain despite the state's weak economy.
Bancorp Hawaii's higher profit reflected improved credit quality and a provision for loan losses of just $3 million, 89.5% below the year-ago level. The company's net interest and noninterest income were both down from the 1993 third quarter.
Bancorp Hawaii chairman and chief executive Lawrence M. Johnson noted that Hawaii's economy is beginning a modest recovery.
"Loan demand remains soft," he said in a statement.