The nation's top 100 banking companies piled up another $41 billion of aggregate market capitalization during the first quarter, continuing the industry's remarkable run-up in value.
Banks' steady earnings growth and lack of visible problems in a modestly growing economy, along with mergers and rumors of mergers, continued to attract investors.
The 10.1% rise in value of the 100 largest banks during the quarter occurred despite sector downgradings by several major Wall Street investment firms and a surprising increase in market interest rates.
As the first quarter ended, the common stock of the 100 leading banks had a combined market value of $447.1 billion.
That is a far cry from the $101.4 billion of total value these industry leaders had slipped to at the end of 1990, in the midst of the industry's worst credit crisis since the Great Depression.
Today, the five largest banking companies alone have combined capitalization of more than $149 billion, led by New York's Citicorp with a market value of $38.9 billion.
Not far behind, at $32.1 billion, is the "new" Chase Manhattan Corp., which merged March 31 with rival Chemical Banking Corp.
BankAmerica Corp. is in third place, at $28.4 billion, followed by Wells Fargo & Co., at $25.8 billion after its April 1 acquisition of First Interstate Bancorp., and NationsBank Corp. at $23.7 billion.
"The numbers really are mind-boggling, when you think about it," said James J. McDermott Jr., president of Keefe, Bruyette & Woods Inc. "It gives these guys a whole different platform from which to be a competitive force."
The overall value of the 100 largest banks at April 1 had not only risen by 10.1% since Dec. 31 but also by an extraordinary 53.5% in 12 months. This year-to-year gain was second only to the 55.2% gain for the calendar year 1995.
The largest single gainer in the first quarter was Unionbancal Corp., San Francisco, whose market capitalization jumped to $3 billion from $1.9 billion, a gain of 52.2% on the strength of its April 2 merger with Bancal Tri-State.
Investors continued to flock to banks that are specialists or industry leaders in credit cards and fee-based businesses, have strong franchises, or were viewed as efficient operators.
The former trend was reflected in the market capitalization-to-assets rankings.
MBNA Corp. ranked first in this category, with market capital equal to nearly half its assets, 49.88%. Second was Fifth Third Bancorp., at 34.16%, followed by Synovus Financial Corp., at 32.88%.
A higher ratio of market capitalization to assets indicates that investors are willing to pay more for a stake in each dollar of a banking company's assets.