First Interstate Bancorp reported third-quarter net income of $130 million, down from $150.5 million for the like period in 1993.
The latest quarter's results included a previously announced pretax restructuring charge of $139 million. On an operating basis, the Los Angeles-based banking company earned $216.2 million, up 43.7% from a year ago.
In the September quarter, First Interstate moved into a new phase of its recovery in which profit gains were fueled by higher revenue and stronger margins. Until the latest period, higher earnings at the nation's 14th-largest bank company largely reflected improvements in credit quality and efficiency rather than top-line growth.
Third-quarter net interest income of $601.8 million was up 14% from the comparable period in 1993. The gain stemmed from earning asset growth generated largely by acquisitions. Total assets at the end of September were $54.2 billion, up 8.2%.
The company's net interest margin was 5.22% in the third quarter, 30 basis points wider than a year ago. First Interstate's margin benefited from the company's stable funding costs and higher rates collected on its earning assets.
The company also boosted noninterest income to $281 million, up 17.6% from a year ago.
The company has made strides in controlling costs, with a ratio of noninterest expenses to revenue of 60% in both the second and third quarter of 1993 before restructuring costs. That compares with 64.9% in the third quarter a year ago.
The company's restructuring program announced last month is aimed at reducing overhead costs below 58% of revenue by next year.
In the third quarter, First Interstate continued its previously announced policy of making no provision for loan losses. In the 1993 third quarter, the company added $21.9 million to loan-loss reserves.
Also as previously announced, First Interstate's board approved the repurchase of up to eight million shares of common stock.