Several major banks reported solid gains in fourth-quarter earnings Tuesday as expected problems in credit quality failed to materialize.

Among the leaders were merger partners Chemical Banking Corp. and Chase Manhattan Corp. Each was up 48%, with earnings of $490 million and $340 million, respectively. Also posting strong gains were NationsBank Corp., Banc One Corp., and Bank of New York Co.

Banks around the country generally were helped by surging fees and trading revenues, coupled with reduced expenses and light loan losses. The gains caught banking analysts by surprise, coming in well above estimates.

"Consumer credit quality is still not an issue with money-centers, despite some uptick in writeoffs," said David Berry, a bank analyst with Keefe, Bruyette & Woods Inc.

The profit improvements weren't universal, however. Citicorp posted fourth-quarter earnings of $905 million, a 13% drop, citing a higher tax bill. On a pretax basis, however, the nation's largest bank showed a 17% jump, to $1.44 billion.

Analysts said reduced costs continue to contribute to improved earnings, including a strong 6% reduction in non-interest expenses at Chemical and a 5% reduction at Chase. The two banks are scheduled to merge at the end of next month, creating a $300 billion-asset behemoth that will surpass Citicorp in size.

Chemical reported a 25% rise in 1995 net income to $1.8 billion, while Citicorp's full-year was up 3% to $3.46 billion. Net income fell 3% at Chase to $1.16 billion, mainly as a result of a slight decline in trading and net interest revenues.

Elsewhere in the Northeast, Bank of New York's fourth-quarter earnings rose 20% to $241 million. For the full-year, income was up 22% to $914 million.

In the Southeast, NationsBank reported fourth-quarter earnings of $510 million, up 26% from the year earlier quarter.

Consumer loan growth shone brightly at NationsBank although earnings per-share of $1.85 did come in 6 cents below consensus estimates. Analysts attributed the difference to a grab bag of discretionary charges, as well as lower trading fees and slightly higher-than-expected indirect auto and credit card losses.

NationsBank's net chargeoffs jumped 59% in the quarter, to $156 million. The company said its ratio of chargeoffs to loans could increase 10 basis points in 1996, from 0.38% in 1995, due to a maturing credit cycle. NationsBank said it expects loan losses to return to more "normalized" levels in 1996.

"Beneath the numbers, it was a solid quarter," said Michael L. Mayo, with Lehman Brothers. "The underlying trends are favorable."

Those trends included an 8% gain in net interest income, to $1.4 billion; a net interest margin that held relatively steady at 3.38%; and noninterest expense that increased only 6% from the year-ago quarter.

The Charlotte, N.C., company made remarkable strides in controlling costs last year, reducing its efficiency ratio to 59.8% from 62.5% in 1994. During a telephone conference call for analysts Tuesday, chief financial officer James H. Hance Jr. said the company believes it can drive the ratio to under 56% by the end of this year.

"Our goal is to push more consumer business through our franchise," Mr. Hance said, noting that the ratio of consumer loans to total loans rose to 45% last year, from 41% in 1994. Credit cards and residential mortgages led the retail loan growth, he said.

Mr. Hance also indicated NationsBank would slow its bank acquisition pace in the Southeast this year in order to complete an ongoing systems integration project. NationsBank currently has four mergers pending, including one with Atlanta-based Bank South Corp.

In the Midwest, Banc One reported profits of $337 million, a 423% increase, resulting from a large charge during the fourth quarter of 1994 for consolidation and securities losses. Detroit-based Comerica Inc. reported fourth quarter income of $107 million, a 10% jump.

The two companies credited strong loan demand and expense controls for record 1995 earnings.

Analysts praised the banks for holding the line on expenses but warned that weak loan demand in 1996 could pressure earnings.

Banc One, based in Columbus, Ohio, reported record full-year income of $1.3 billion, a 27% increase from 1994.

Company officials said the 1995 results indicated a return to "traditional levels of performance." But McDonald & Co. analyst Fred Cummings saw the fourth quarter as one of "mixed results." While the $90.5 billion-asset Banc One had strong loan growth, especially in its credit card business, Mr. Cummings predicted earnings growth would have been 5% without the chargeoffs, significantly below the 12% average posted by other large banks, he said.

Still, Mr. Cummings said Banc One has done an excellent job of controlling expenses.

Likewise, Michael Moran, an analyst with Roney & Co., praised Comerica for its controlled expenses and revenue growth.

Comerica, with $35 billion in assets, reported a record $413 million for the full year, a 7% increase from 1994.

Mr. Moran said Comerica could have reported even higher earnings, but instead increased its loan-loss provision, which he described as a rare and praise-worthy act.

Meanwhile, First Chicago NBD Corp., in its first combined balance sheet since completing its merger Nov. 30, reported fourth-quarter earnings of $126 million, a 60% reduction from the same period in 1994. For the year, First Chicago reported income of $1.15 billion, down 6%.

First Chicago took $267 million in charges for merger-related costs. The Chicago bank, which hopes to cut $200 million in expenses next year and shrink assets by $25 billion within the next two years, reported total assets of $122 billion.

This article was reported by James. R. Kraus, Brett Chase, and Kenneth Cline. +++ Citicorp New York Dollar amounts in millions

(except per share) Fourth Quarter 4Q95 4Q94 Net income $905.0 $1,042.0 Per share 1.72 1.95 ROA 1.35% 1.55% ROE 18.60% 24.00% Net interest margin 4.91% 4.61% Net interest income 3,106.0 2,798.0 Noninterest income 2,229.0 2,190.0 Noninterest expense 2,818.0 2,723.0 Loss provision 531.0 558.0 Net chargeoffs 467.0 458.0 Year to Date 1995 1994 Net income $3,464.0 $3,366.0 Per share 6.48 6.29 ROA 1.29% 1.29% ROE 18.30% 21.40% Net interest margin NA 4.64% Net interest income 11,994.0 10,986.0 Noninterest income 8,727.0 7,837.0 Noninterest expense 11,102.0 10,256.0 Loss provision 1,991.0 1,881.0 Net chargeoffs 1,692.0 1,144.0 Balance Sheet 12/31/95 12/31/94 Assets $256,853.0 $250,489.0 Deposits 167,131.0 155,726.0 Loans 165,642.0 152,420.0 Reserve/nonp. loans 128.00% 109.20% Nonperf. loans/loans 2.50% 3.10% Nonperf. assets/assets 2.20% 2.60% Nonperf. assets/loans + OREO 3.30% 4.20% Leverage cap. ratio NA 6.70% Tier 1 cap. ratio 8.40%* 7.80% Tier 1+2 cap. ratio 12.30%* 12.00%

*Estimate

NationsBank Corp. Charlotte, N.C. Dollar amounts in millions

(except per share) Fourth Quarter 4Q95 4Q94 Net income $510.0 $405.0 Per share 1.85 1.45 ROA 1.06% 0.92% ROE 16.98% 14.68% Net interest margin 3.38% 3.40% Net interest income 1,438.0 1,326.0 Noninterest income 846.0 639.0 Noninterest expense 1,342.0 1,261.0 Loss provision 142.0 70.0 Net chargeoffs 156.0 98.0 Year to Date 1995 1994 Net income $1,950.0 $1,690.0 Per share 7.04 6.06 ROA 1.03% 1.02% ROE 17.01% 16.10% Net interest margin 3.33% 3.58% Net interest income 5,560.0 5,305.0 Noninterest income 3,078.0 2,597.0 Noninterest expense 5,163.0 4,942.0 Loss provision 382.0 310.0 Net chargeoffs 421.0 316.0 Balance Sheet 12/31/95 12/31/94 Assets $187,298.0 $169,604.0 Deposits 100,691.0 100,470.0 Loans 116,042.0 102,367.0 Reserve/nonp. loans 306% 273% Nonperf. loans/loans 0.61% 0.78% Nonperf. assets/assets 0.46% 0.67% Nonperf. assets/loans + OREO 0.73% 1.10%

Leverage cap. ratio 6.27% 6.18% Tier 1 cap. ratio 7.24% 7.43% Tier 1+2 cap. ratio 11.58% 11.47% Chemical Banking Corp. New York Dollar amounts in millions (except per share) Fourth Quarter 4Q95 4Q94 Net income $490.0 $179.0 Per share 1.81 0.61 ROA 1.05% 0.42% ROE 17.66% 6.29% Net interest margin 3.16% 3.55% Net interest income 1,174.0 1,169.0 Noninterest income 958.0 815.0 Noninterest expense 1,250.0 1,593.0 Loss provision 116.0 85.0 Net chargeoffs 116.0 258.0 Year to Date 1995 1994 Net income $1,805.0 $1,294.0 Per share 6.73 4.60 ROA 1.00% 0.78% ROE 17.08% 12.32% Net interest margin 3.33% 3.61% Net interest income 4,689.0 4,674.0 Noninterest income 3,766.0 3,597.0 Noninterest expense 5,001.0 5,509.0 Loss provision 478.0 550.0 Net chargeoffs 553.0 1,095.0 Balance Sheet 12/31/95 12/31/94 Assets $182,926.0 $171,423.0 Deposits 98,417.0 96,506.0 Loans 82,143.0 78,767.0 Reserve/nonp. loans 277.92% 266.95% Nonperf. loans/loans 1.04% 1.18% Nonperf. assets/assets 0.50% 0.66% Nonperf. assets/loans + OREO NA NA Leverage cap. ratio 6.40% 6.30% Tier 1 cap. ratio 8.40%* 8.00% Tier 1+2 cap. ratio 12.10%* 12.00%

*Estimate ===

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