Strong fee income contributed to generally strong earnings gains among a group of northeastern banks and thrifts reporting first-quarter results.
However, loan growth was feeble, especially in residential mortgages. "Originations were probably softer than many of the banks had hoped for," said Kevin T. Timmons, an analyst at First Albany Corp.
Fees from brokerage activities, consumer deposits, and commercial lending helped take up the slack, analysts said.
Cost controls also helped, according to Gerard Cassidy, an analyst in Portland, Me., with Tucker Anthony "There is an unusual consistency in earnings," he said.
Princeton, N.J.-based Summit Bancorp reported first-quarter profits of $66.5 million. The $23 billion-asset bank lost $2.2 million in the same quarter of last year, due to a one-time charge.
Summit earned 85 cents per share on an operating basis, two cents short of consensus estimates.
Net operating earnings grew 22.8% to $83.2 million.
Loans grew 6.5%, to $15.5 billion, driven by a 14.5% increase in consumer loans. Nonperforming assets fell 34.4%, to $141.2 million.
Dime Bancorp, an $18.5 billion-asset thrift based in New York City, had net income of $32.9 million, up 22%.
On a per-share basis, Dime earned 31 cents, a penny above analysts' estimates.
Net interest income was $117.3 million, up 2% from last year. Noninterest income, driven by gains in revenues from brokerage activities, rose 16%, to $27.6 million. Securities and insurance brokerage fees grew 29.5% to $6 million.
Expenses were $80.6 million, down slightly from $81.6 million.
GreenPoint Financial Corp., a $13.2 billion-asset New York City thrift, had net income of $39.7 million, up 45%. Earnings per share were 94 cents, 9 cents above estimates.
Mortgage originations ballooned 73%, to $645 million, but fell 12% from last quarter. Greenpoint attributed the annual increase to expansion of its No Doc, residential, lending program. Nonperforming loans were down 12%, to $349 million.
Sovereign Bancorp, a $10.3 billion-asset thrift in Wyomissing, Pa., reported net income down 87% to $9.2 million. But the results included a $19.9 million merger charge.
Operating earnings per share of 25 cents were two cents below analysts' consensus estimates.
Consumer loan originations grew 137%, to $134 million. Sovereign gained customers who defected from rival banks that merged with one another last year, the bank said. Net interest income overall was $61.7 million, up 8.6% from last year.
Astoria Financial Corp., a $7.7 billion-asset thrift based in Lake Success, N.Y., reported net income of $15.4 million, up 4.9%.
On a per share basis, Astoria earned 72 cents, 4 cents above analysts' estimates.
Net interest income grew 10.6% to $49.5 million. Mortgage loan originiations grew 12.9% to $210.1 million. Nonperforming assets fell 12.1%, to $40.1 million.
Noninterest income grew 10.6%, to $3.1 million, mostly from the sale of securities and loans.
People's Bank, a $7.5 billion-asset thrift in Bridgeport, Conn., had net income of $22 million, up 5%.
People's earned 54 cents per share, 2 cents above analysts' estimates.
The bank cited strength in its credit card business. Net chargeoffs were flat from last year, at 4.01%. Delinquencies were 3.55% of receivables, down from 4.04%.
Nonperforming assets were down 41% to $68 million. Noninterest income was up 13%, driven by a 23% increase in credit card fees and a 33% rise in brokerage fees.
Peoples Heritage Financial Group, a $5.5 billion-asset thrift based in Portland, Me., had net income of $17 million, up 35%. Earnings per share of 60 cents met analysts' estimates.
Noninterest income was up 30% to $12.3 million, driven by a 63% increase in customer service fees. Income from mortgage banking grew 26% to $4.2 million. Trust and investment advisory fees grew 15% to $1.9 million.
Onbancorp, a $5.5 billion-asset banking company based in Syracuse, had net income of $12.1 million, up 18%. Onbancorp earned 87 cents per share, 3 cents above analysts' consensus estimates.
Commercial loans were up 14% to $663 million. Trust services grew 24% to $843 million. Consumer loans increased 28% to $768 million. u