WASHINGTON Bank Profits Hit New High In 1994 with a 3.7% Jump

Bank profits jumped 3.7% last year to a record $44.7 billion, according to a Federal Deposit Insurance Corp. report. The rise in profits was attributed to robust lending. FDIC Chairman Ricki Tigert Helfer said the earnings were "astounding," but warned that banks may lose part of their promised deposit insurance premium reduction as thrifts charter banks to escape the industry's high rates.

March 16

18395

A major milestone in the nation's savings and loan debacle was passed when the government sold off the last failed thrift institution in its inventory. The last block of the $150 billion S&L crisis was Newark's Carteret Federal Savings Bank, which failed in December 1992.

March 13

18075

Deputy Treasury Secretary Frank Newman said Congress should not block thrifts from chartering commercial banks to evade high deposit insurance premiums. "It's awfully hard to get legislation to stop every creative idea that comes up," Mr. Newman said. Bank premiums are scheduled to drop to about 4 cents for every $100 of domestic deposits by yearend - thrift rates will remain at 24 cents.

March 14

18297

House Banking Committee Chairman Jim Leach voiced firm opposition to lawmakers who want to take the Glass-Steagall repeal one step further and allow companies to own both commercial banks and nonfinancial companies. If the house votes to permit such affiliations, Mr. Leach said, "It would be the death knell for my support of the bill."

March 15

18334

Securities and Exchange Commission Chairman Arthur Levitt said Glass- Steagall legislation, sponsored by House Banking Committee Chairman Jim Leach, unfairly limits securities firms. While Mr. Levitt said he agreed with the major thrust of Mr. Leach's bill, he added that the measure's call for a "two-way street," allowing banks and securities firms to enter each other's business, is a misnomer.

March 16

18396 REGIONAL BANKING Wachovia and SunTrust Reports Reveal Restructuring Plans

Wachovia Corp. and SunTrust Banks Inc. both said they were in the process of adopting major organizational and structural changes. Annual reports show that these banks and others in the Southeast are trying to position themselves for heightened competition when national interstate banking begin to take hold this year.

March 13

18030

Major U.S. banks are increasing their equity investments in the U.S., Latin America, Europe and Southeast Asia. For example, Chemical Bank Corp. invested $2.5 million in 1987 for Office Depot Inc. and earned $31 million in stock when the company went public.

March 15

18300

Profitability leveled off last year at the nation's largest banking companies after three years of sharp gains, according to an American Banker survey. Analysts said the banks had been heading for record profits last year until trading revenues got clobbered in the fourth quarter as executives mistakenly guessed that interest rates would remain level.

March 17

18401

Compass Banchsares' management issued a fight letter asking shareholders to reject founder and Director Harry Brock Jr.'s candidates for the board. Mr. Brock issued a letter of his own, attempting to replace the three Compass directors with his own nominees and take control of the 12-person board, with an eye to sell the company.

March 14

18263

Reacting to news that the Equitable is looking for a commercial bank willing to buy its Donaldson Lufkin & Jenrette Securities Corp. unit, analysts said any deal is unlikely since money-center banks prefer to build up capital markets activities in-house.

March 15

18299 COMMUNITY BANKING Governor Slaps a Veto On Colorado Opt-Out Bill

Colorado's Governor Roy Romer vetoed a bill that would have barred national banks from branching into or out of the state. The governor cited arguments from large banks that such a bill would prevent Colorado from becoming "a regional economic center" for the western U.S.. The veto could slow the momentum for other state's to reject the federal law.

March 14

18289

Nine years after it was cobbled together with institutions resembling scraps from a junk heap, Miami-based Intercontinental Bank has evolved into a $1.1 billion-asset object of admiration in the Florida banking scene. The company is considered one of the most attractive acquisition candidates in Florida.

March 14

18266

SouthFirst Bankshares, an $84 million-asset thrift in Sylacauga, Ala., won a $788,000 jury verdict against U.S. Fidelity and Guarantee Co., a Baltimore-based insurance company that refused to compensate it fully for losses incurred in an embezzlement case.

March 15

18303

North Fork Bancorp and BRT Realty Trust are accusing Donaldson, Lufkin & Jenrette Securities Corp. of racketeering, mail and wire fraud, and securities law violations in connection with two issues of mortgage backed securities in 1991 and 1993. The 19-count lawsuit totals $175 million.

March 16

18343

While changing technology will dramatically alter the nature of banking, small banks that have become part of the fabric of their communities will continue to thrive, according to Frank P. Bramble, the president and chief executive of First Maryland Bancorp of Baltimore.

March 17

18406 COMPLIANCE Fla. Bank Compliance Chief Poses as Banker, Consulatant

Phillips G. Gay Jr., chief compliance officer at Bank of North American in Fort Lauderdale, Fla., has made a name for himself as one of the most knowledgeable bankers in compliance. These days he's spreading his knowledge freely, having set up a compliance consulting business for the bank last year. So far, Mr. Gay has 15 customers, mostly small Florida banks.

March 16

18357

While large banks are taking advantage of new rules that let banks offer discounts when customers buy more than one product or service, small banks are holding back.

March 16

18363 CREDIT UNIONS Stan Hollen: Tough Guy In Charge at Golden 1

Since Stan Holden started running Golden 1 Credit Union in 1984, he has extended the company's reach throughout California, more than quintupled its assets and introduced automation to the company. Golden 1, the state's largest credit union, has made 16 acquisitions in Mr. Hollen's 11 years as president and chief executive officer.

March 13

18045

Its handling of the proposed merger between two large West Coast credit unions, which died March 3, has established the National Credit Union Administration as the arbiter of the industry's direction.

March 13

18052 CREDIT/DEBIT/ATMs Dial-A-Mattress Dumps Nabanco, Citing 'Gangster Tactics'

Nabanco, the top ranked merchant acquirer based in Jacksonville, Fla., got dumped by Dial-a-Mattress in a highly public falling out. Nabanco "behaved in ways that we normally associate with gangster movies," the mattress retailer said in a news release.

March 14

18294

For the first time since 1992, the American Bankers Association's index of consumer loan delinquencies increased in the fourth quarter last year.

March 17

18437

MasterCard International said its payment volume rose 24% in 1994 to $172.4 billion - the fastest growth since 1985. The New York-based association said that cobranding was the most significant factor contributing to its growth in cards - 19.3% to 146 million - and volume in the United States.

March 15

18311

First Data Corp., the top card processor, completed its acquisition of Card Establishment Services Inc., one of the top three providers of transaction services to merchants. Also, First Data announced that Norwest Card Services has joined its Merchant Bank Alliance program.

March 14

18293

St. Louis-based SBC Communications Inc. and Mercantile Card Services Inc. released details of the Southwestern Bell Visa card. SBC offers 5% cash back on all monthly phone bill charges, no fee and a 7.9% introductory rate. Customers earn 1% rebate on all other card purchases and a 1% credit for transferring balances.

March 13

18038 INVESTMENT PRODUCTS First Union to License 800 Staffers As Part of Annuities Sales Push

First Union Corp., will license 800 employees to sell annuities to branch customers - 400 staffers licensed by yearend and 400 more ready by the end of 1996 - according to David de Gorter, director of First Union Insurance Group. "We want to be a full-service financial provider," he said. "If you're missing annuities, you're missing a piece of what customers want."

March 15

18319

Arnold E. Amstutz, chairman of Citicorp Investment Services, will move to a new post in Citi's private banking department next month after just 14 months in the position. He will be succeeded by Steven J. Frieberg, a Florida-based senior vice president who has been overseeing Citicorp's retail sales in the southeast.

March 16

18319

For the second time in less than a year, Fidelity Investments is shuffling the management of its bank sales group. The Boston-based fund giant has recruited a top executive from a rival company to oversee sales through intermediaries such as banks, brokerage firms and insurance companies.

March 13

18059

A San Francisco consulting firm has caught banks off-guard with a plan to sell detailed information about their investment sales programs to anyone who can cough up a $72,000 annual fee. Prophet Market Research, which has specialized in conducting private "mystery shopping" studies for banks that want to check their own compliance, now plans to gather such information on a regular basis.

March 17

18424

Firstar Corp. is claiming dividends from a pair of efforts to educate investors in its mutual funds. The Milwaukee-based banking company is including in its shareholder statements unusually detailed analyses of its mutual fund portfolios.

March 14

18283 MORTGAGES Prudential Mortgage Unit Going on the Block

Prudential Insurance Co. of America, which surged to prominence in mortgage banking in the early 1990s, is now preparing to exit the business. The big insurer said it plans to sell its Residential Services Corporation of America, which encompasses several mortgage related businesses. The unit could fetch well over $1 billion.

March 16

18388

Concerns about the pricing and risk of adjustable-rate mortgages by the large western thrifts may have been overplayed, according to a top thrift regulator. "While it's a very competitive market out there, we certainly don't have people doing really stupid things," said John Robinson, director of the west region of the Office of Thrift Supervision.

March 16

18387

The National Association of Realtors is speaking out against the possible elimination of the mortgage interest tax deduction by Congress, and speaking loudly. "What these ill-conceived ideas really amount to is a substantial tax increase for our nation's homeowners," said Edmund Woods, president of the group.

March 17

18428

Resource Bancshares Mortgage Group, Columbia, S.C., is expanding to buy loans from lenders on the West Coast and the Southwest. The company reckons that the industry's contraction presents a prime opportunity to expand.

March 15

18325

Chase Manhattan Bank appears to have the inside track to win the bidding for the $9 billion servicing portfolio of Wachovia Corp. The portfolio could fetch $145 million, sources said.

March 13

18063 TECHNOLOGY Microsoft Looms as Potent Foe In Industry, Study Warns

A study predicts that in the next few years Microsoft Corp. will penetrate more deeply into banks' financial transaction businesses than what has been expected. Killen & Associates, a consulting firm, projected that by the year 2000, Microsoft will be earning nearly $2 billion in annual revenues from its electronic financial services market.

March 14

18287

Electronic Data Systems Corp. has signed on three new thrifts for the core processing software, known as Miser, it recently acquired from Computer Associates International Inc.. EDS finalized deals with Green Point Savings Bank of Brooklyn, N.Y., Chase Federal Bank of Miami and the Savings Bank of the Finger Lakes in Geneva, N.Y.

March 13

18053

CheckFree Corp. has agreed to provide electronic bill-payment services through screen telephones from SmartPhone Communications Inc.. Under the terms of the deal, CheckFree can sell products and services of other firms that deliver their offerings through SmartPhone, including reports from Dun & Bradstreet and Dow Jones news.

March 14

18286

Nationsbank Corp. says a cash letter recovery system it bought last year helped recover almost $1 million in lost checks in its first issue. The system, in Servantis Systems Inc., uses data from missing checks to initiate automated clearing house transactions.

March 15

18316

MasterCard International has named J. Randall Peyser as vice president in its MasterBanking unit. In his new position, Mr. Peyser will develop remote banking products and services for MasterCard member financial institutions. Mr. Peyser comes to MasterCard with 15 years experience in electronic banking and financial services.

March 16

18365 FINANCE Top Banks Pouring Excess Capital into Buybacks

The U.S. banking industry embraced stock buybacks with enormous vigor in 1994, and experts are predicting a further avalanche of repurchases in 1995. Last year alone, the top 50 U.S. banking companies retired 124.2 million shares at a cost of $5.6 billion, according to Keefe, Bruyette & Woods Inc.

March 13

18048

Bankers Trust New York Corp. shares dropped 16% on Monday to $51.625 - 33% below the 52-week high - when investors reacted to news of a projected first quarter loss of $125 million. Reports that Bankers Trust had serious Latin American and derivatives losses brought the shares of other money centers down in sympathy.

March 14

18290

Woolworth Corp., still feeling after shocks of an accounting scandal, has had to refinance its $1.5 billion bank loan at higher cost. Fees were increased across the board for the recently downgraded five-and-dime retailer, reflecting larger underwriting commitments that were needed to get the deal done, bankers said last week.

March 13

18070

Anxiety about interest rates, sparked by the dollar's fall and reinforced by a strong employment report, continued to cloud the outlook for bank stocks. "If the dollar is still taking gas by the end of the month when the Fed meets, this report could give them the justification for a tightening," said economist Robert G. Dederick.

March 13

18071

Credit Suisse was the sole underwriter on a trio of syndicated loans totaling $3.2 billion for Hoffman LaRoche, Luxottilca Group and California Energy. Market sources point out that the Luxottilca leveraged loan plays into one of Credit Suisse's developing strengths - leveraged lending.

March 15

18337

Salomon Brothers downgraded BankAmerica Corp., First Bank System and First Fidelity Bancorp. saying the economy was strengthening, making another rate hike likely. The three banks were downgraded to "hold" from "buy."

March 16

18391

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