Helped by a strong showing in its domestic operations, Bank of Boston Corp. reported net income Thursday of $443 million for the full year 1994, up 34%.
The bank also reported strong fourth-quarter results, of $121 million, 17% higher than the year-earlier period.
Latin American operations performed well, but analysts said rising interest rates in the United States provided most of the fuel to the $44.7 billion-asset bank's bottom line.
Loan yields grew faster than retail deposit rates, said Lawrence Cohn, an analyst at PaineWebber Inc. The bank benefited from consumer-related loans too, particularly from its finance company, Fidelity Acceptance Corp.
All together, those factors contributed to a 7.4% jump in net interest revenue in the fourth quarter, to $435 million, from the year-earlier period. The increase helped lift the bank's net income above Wall Street's expectations. Analysts looked for earnings in the fourth quarter of 93 cents per share, but the bank earned $1.01 per share.
The net interest margin also increased in the fourth quarter to 4.39% from 3.86% in the year-earlier period.
Analysts noted that earnings were strong, even with a $10 million increase in the bank's loan-loss provision to $35 million.
Bank of Boston also achieved a $59.6% efficiency ratio in the fourth quarter, compared with 63.1% a year ago.
"Our personal banking franchise is healthy and growing, bolstered by recent acquisitions, and the market share and efficiencies they afford," said Ira Stepanian, chairman and chief executive officer.
Return on average common equity rose to 16.86% in the fourth quarter from 16% for the same period a year ago. Return on average assets was 1.08%, up from 1.01% in 1993's fourth quarter.
"This is the only bank I follow that has had a distinctly positive surprise," Mr. Cohn said.
The bank also said it dropped its level of nonperforming assets at yearend by 33% to $441 million. +++ Bank of Boston Corporation Boston, MA Dollar amounts in millions (except per share) Fourth Quarter 4Q94 4Q93 Net income $120.8 102.5 Per share 1.01 0.85 ROA 1.08% 1.01% ROE 16.86% 16.00% Net interest margin 4.39% 3.86% Net interest income 433.4 349.3 Noninterest income 198.6 189.0 Noninterest expense 381.9 346.6 Loss provision 35.0 10.0 Net chargeoffs 31.3 38.5 Full Year 1994 1993 Net income $435.3 299.0 Per share 3.61 2.44 ROA 1.01% 0.78% ROE 15.82% 11.78% Net interest margin 4.14% 3.94% Net interest income 1,572.6 1,344.9 Noninterest income 828.0 745.5 Noninterest expense 1,479.2 1,530.8 Loss provision 130.0 70.1 Net chargeoffs 125.8 222.9 Balance Sheet 12/94 12/93 Assets 44,629.7 $40,587.9 Deposits 31,356.3 29,614.1 Loans 31,004.7 28,782.0 Reserve/nonp. loans 186% 140% Nonperf. loans/loans 1.2% 1.9% Nonperf. assets/assets 1.0% 1.6% Leverage cap. ratio 6.5% 6.8% Tier 1 cap. ratio 7.0% 7.2% Tier 1+2 cap. ratio 12.1% 12.4% ===