Sharp growth in fee-based revenue boosted Bank of Boston Corp.'s third-quarter net income a dramatic 202%, to $124 million. the bank reported Thursday.
Earnings per share were $1.04. 71% above the 30 cents per share reported for the same period a year ago, exceeding analyst's expectations.
"The fundamental earnings power looked to be stronger than I expected." said Ronald Mandle of Sanford C. Bernstein
Noninterest income jumped 12% year over year, to $202 million from $191 million a year ago. Fee-based revenue grew to $607 million, a 14% increase.
"The revenue growth was very diversified." said chief financial officer William Shea. "It came in our three major business areas: personal banking, corporate banking, and global banking."
Latin American operations also gave the bank a one-time $8 million jump as it capitalized on interest rate movements in Brazil. Without the special item. the bank would have earned $116 million for the quarter.
Mr. Shea noted that loan growth also increased 10%, to $30.8 million from $28 million at Sept. 30 last year. The recent acquisition of Malden, Mass.-based Pioneer Financial accounted for most of the increase. Mr. Shea also attributed the earnings improvement to expense reduction. The bank lowered its efficiency ratio to 60.4% from 65.2% in the year-earlier quarter.
Much of that efficiency came from dumping four businesses. The bank sold its factoring unit, its freight payment business, and its Vermont and Maine subsidiaries. Credit quality also improved. Nonperforming assets stood at 1.5% of total loans.
Separately, in Atlanta, $6 billion-asset Bank South Corp. reported net income of $20.7 million for the third quarter, a 33.2% jump from the $15.5 million earned in the same period last year. Earnings per share totaled 38 cents, compared with 32 cents per share for the third quarter of 1993. BANK OF BOSTON Boston Dollar amounts in million (except per share)THIRD QUARTER 3Q94 3Q93Net income ................ $124.0 $41.4Per share ................. 1.04 0.30ROA ....................... 1.12% 0.42%ROE ....................... 17.90% 5.62%Net interest margin ....... 4.34% 3.91%Net interest income ....... 423.9 340.8Noninterest income ........ 202.2 191.2Noninterest expense ....... 378.3 440.2Loss provision ............ 25.0 10.0Net chargeoffs ............ 32.4 46.4 YEAR TO DATE 1994 1993Net income ................ $314.6 $196.5Per share ................. 2.60 1.58ROA ....................... 0.99% 0.70%ROE ....................... 15.44% 10.33%Net interest margin ....... 4.05% 3.98%Net interest income ....... 1,339.1 995.5Noninterest income ........ 629.5 556.6Noninterest expense ....... 1,097.3 1,184.2Loss provision ............ 95.0 60.1Net chargeoffs ............ 213.5 184.4 BALANCE SHEET 9/30/94 9/30/93Assets .................... $44,294.1 $39,189.1Deposits. ................. 30,312.5 28,532.5Loans ..................... 30,880.8 27,937.2Reserve/nonp. loans ....... 179% 143%Nonperf. loans/loans ...... 1.2% 1.7%Nonperf. asset/asset ...... 1.1% 1.8%Tier cap. ratio ........... 6.5% 6.8%Tier 1 cap, ratio ......... 6.9% 7.2%Tier 1+2 cap. ratio ....... 11.9% 11.6%
