A batch of the nation's biggest banking companies reported mostly sunny
First Union Corp., the sixth-largest U.S. banking company, reported net
The only disturbance came from No. 19-ranked State Street Corp. The
At Fleet Financial Group, which is preparing to merge with BankBoston
Nancy Bush of Ryan, Beck & Co. called Fleet's performance "remarkably
"We're seeing a lot of margin improvement this quarter," said Lori
"I've been pleasantly surprised," said Katrina Blecher of Brown Brothers
First Union reported operating earnings of 90 cents per share.
A 4% decline in capital markets income, to $380 million, offset gains in
"The nature of capital market revenue is volatility," Ms. Blecher said.
On the plus side, capital management fee income gained 16% in the
"Capital management has been a steady growth item," said David West, a
First Union will get further help in this area from its April agreement
The $230 billion-asset First Union has tamped down earnings expectations
Analysts said First Union is making progress in those areas. "Apparently
Adjusted for expenses related to last year's purchase of Money Store, a
But analysts are continuing to view First Union with caution. "The
He and others said First Union is likely to achieve its operating
Shares in First Union ended Wednesday's trading at $46.5625, down 12.5
Fleet Financial Group
Earnings per share of 75 cents at Boston-based Fleet beat analysts'
Acquisitions over the last two years have paid off in revenue growth,
"We are a much more diversified company now, with better balance and
As at other regional banking companies, nonperforming assets ticked up
Analysts said they were not concerned with asset quality at Fleet, which
"To panic and sell a bank stock because of nonperformers may be
The $107 billion-asset company plans to sell its entire Massachusetts
But the Massachusetts divestiture is only part of the package. Fleet
Mr. McQuade said Wednesday that the bidding process has narrowed
Meanwhile, Fleet's businesses continue to "knock the ball out of the
Investment services fees, which include the Quick & Reilly Group
Capital markets revenues skyrocketed 72%, to $184 million. Credit card
Expenses rose 16%, to $1.17 billion.
Shares in Fleet ended Wednesday up 18.75 cents, at $42.125.
U.S. Bancorp
Fee income from brokerage activities and deposit accounts lifted net
The Minneapolis company reported earnings per share of 51 cents, a penny
Noninterest expenses increased 11%, to $738 million, due in large part
"Spending at Piper was a little higher than we thought it would be,"
In addition, the $77.4 billion-asset banking company paid $3 million to
But income from Piper Jaffray helped overcome these expenses to provide
Piper Jaffray also helped boost investment products fees and
In addition, service charges on deposit accounts jumped more than 8%, to
"While the Street would have liked to see the bank meet consensus, the
Efficiency at U.S. Bancorp improved significantly during the quarter.
But net chargeoffs were also up 21%, to $140 million, because of an
Shares in U.S. Bancorp closed Wednesday at $32.625, down $1.125.
Wachovia Corp.
Net income at Wachovia, the 16th-largest U.S. banking company, rose 18%,
Operating earnings at the Winston-Salem, N.C.-based company jumped 10%
Two-thirds of the company's 13% gain in revenue came from fee-income
"Wachovia is going after wealth management in a very total sense-
The $67 billion-asset company did suffer from a 65% surge in
"Their credit losses are nothing out of the ordinary-nothing to get
Allowances for loan losses were 2.6 times nonperforming loans at the end
Overall, Wachovia's outlook is rosy, analysts said. "I think they will
Wachovia shares closed Wednesday's trading at $80.25, up 18.75 cents.
State Street Corp.
Net income rose 12.8% to $123 million at Boston-based State Street, as
The performance failed to impress Wall Street, however. Analysts said
Most of the gain-$10 million-came from the sale last month of a
Analysts said the $53 billion-asset banking company was also having
Responding to sharp criticism from Wall Street that sent its stock
Mr. O'Kelley added that a 4 cent per share difference between reported
"I'm a bit baffled by the reaction" of Wall Street, he said.
Analysts, however, said they saw strong indications that State Street's
One factor is that economic recovery in the overseas markets State
"As a result of the anticipated revenue deceleration, they will have to
Mr. O'Kelley acknowledged that revenues were not growing at the red-hot
Despite the difficulties, State Street reported a 17% gain in fee
Fees from custody and other fiduciary services rose 13% to $432 million.
Assets under administration topped $5.3 trillion in the quarter. Assets
Shares in State Street ended Wednesday's trading at $75.5625, down
SouthTrust Corp.
SouthTrust, the nation's 21st-largest banking company, reported record
"Loan volume was up sharply, fee income was absolutely solid, and
Loans, net of unearned income, rose 18.4%, to $29.2 million. Noninterest
Efficiency at the Birmingham, Ala.-based company improved to 56% from
"That's been one of their strengths" for sometime, Ms. Reeves said.
Provisions for loan losses soared 25% to $31.8 million, but that was
Stock in SouthTrust closed Wednesday's trading at $37.3125, up 28.125
Wachovia Corp.
Winston-Salem, N.C.
Dollar amounts in millions (except per share)
Net income $248.0 $210.0
Per share 1.19 1.00
ROA 1.51% 1.31%
ROE 18.14% 16.11%
Net interest margin 4.31% 4.21%
Net interest income 627.0 595.0
Noninterest income 415.0 318.0
Noninterest expense 581.0 517.0
Loss provision 75.0 68.0
Net chargeoffs 74.0 68.0
Year to Date 1999 1998
Net income $491.0 $405.0
Per share 2.37 1.93
ROA 1.51% 1.28%
ROE 18.22% 15.71%
Net interest margin 4.36% 4.21%
Net interest income 1,245.0 1,175.0
Noninterest income 749.0 605.0
Noninterest expense 1,073.0 1,011.0
Loss provision 155.0 143.0
Net chargeoffs 155.0 142.0
Balance Sheet 6/30/99 6/30/98
Assets $67,013.0 $64,727.0
Deposits 40,816.0 39,915.0
Loans 48,428.0 44,459.0
Reserve/nonp. loans 261.77% 429.89%
Nonperf. loans/loans 0.43% 0.29%
Nonperf. assets/assets 0.35% 0.24%
Nonperf. assets/loans + OREO 0.48% 0.34%
Leverage cap. ratio NA 8.91%
Tier 1 cap. ratio 7.60% 8.10%
Tier 1+2 cap. ratio 11.10% 10.50%
U.S. Bancorp
Minneapolis, Minn.
Dollar amounts in millions (except per share)
Net income $374.3 $320.3
Per share 0.51 0.43
ROA 1.97% 1.80%
ROE 23.80% 20.80%
Net interest margin 4.86% 4.91%
Net interest income 823.3 777.9
Noninterest income 655.9 561.1
Noninterest expense 752.8 724.6
Loss provision 126.0 93.0
Net chargeoffs 140.3 106.7
Year to Date 1999 1998
Net income $741.1 $649.1
Per share 1.02 0.86
ROA 1.98% 1.85%
ROE 24.10% 21.40%
Net interest margin 4.84% 4.95%
Net interest income 1,616.7 1,545.9
Noninterest income 1,282.2 1,019.6
Noninterest expense 1,471.6 1,330.2
Loss provision 243.0 183.0
Net chargeoffs 279.9 209.9
Balance Sheet 6/30/99 6/30/98
Assets $77,390.0 $73,750.0
Deposits 49,267.0 49,307.0
Loans 59,928.0 54,796.0
Reserve/nonp. loans 327% 359%
Nonperf. loans/loans 0.49% 0.49%
Nonperf. assets/assets 0.41% 0.41%
Nonperf. assets/loans + OREO 0.53% 0.54%
Leverage cap. ratio 7.10% 7.40%
Tier 1 cap. ratio 6.60% 7.20%
Tier 1+2 cap. ratio 11.10% 11.50%
First Union Corp.
Charlotte, N.C.
Dollar amounts in millions (except per share)
Net income $873.0 $249.0
Per share 0.90 0.26
ROA 1.56% 0.46%
ROE 21.59% 6.83%
Net interest margin 3.88% 3.80%
Net interest income 1,878.0 1,832.0
Noninterest income 1,706.0 1,531.0
Noninterest expense 2,053.0 2,809.0
Loss provision 180.0 150.0
Net chargeoffs 180.0 156.0
Year to Date 1999 1998
Net income $1,579.0 $1,039.0
Per share 1.63 1.07
ROA 1.42% 0.97%
ROE 19.73% 13.94%
Net interest margin 3.81% 3.94%
Net interest income 3,689.0 3,691.0
Noninterest income 3,656.0 2,880.0
Noninterest expense 4,562.0 4,647.0
Loss provision 344.0 285.0
Net chargeoffs 344.0 285.0
Balance Sheet 6/30/99 6/30/98
Assets $229,911.0 $228,996.0
Deposits 133,603.0 138,598.0
Loans 133,579.0 137,390.0
Reserve/nonp. loans 1.34% 1.36%
Nonperf. loans/loans 0.63% 0.58%
Nonperf. assets/assets 0.41% 0.40%
Nonperf. assets/loans + OREO 0.70% 0.66%
Leverage cap. ratio 5.95% 6.01%
Tier 1 cap. ratio 6.61% 7.04%
Tier 1+2 cap. ratio 10.61% 11.35%
SouthTrust Corp.
Birmingham, Ala.
Dollar amounts in millions (except per share)
Net income $109.7 $89.5
Per share 0.65 0.55
ROA 1.13% 1.07%
ROE 15.72% 14.31%
Net interest margin 3.81% 3.78%
Net interest income 340.5 292.3
Noninterest income 107.0 93.1
Noninterest expense 248.9 222.9
Loss provision 31.8 25.5
Net chargeoffs 20.4 13.7
Year to Date 1999 1998
Net income $214.2 $175.9
Per share 1.27 1.09
ROA 1.12% 1.09%
ROE 15.56% 14.51%
Net interest margin 3.76% 3.80%
Net interest income 660.8 567.8
Noninterest income 218.1 181.3
Noninterest expense 491.5 435.4
Loss provision 62.1 43.3
Net chargeoffs 35.8 26.8
Balance Sheet 6/30/99 6/30/98
Assets $40,066.5 $34,667.9
Deposits 26,296.7 21,150.8
Loans 29,178.4 24,654.1
Reserve/nonp. loans 357.43% 335.61%
Nonperf. loans/loans 0.39% 0.43%
Nonperf. assets/assets 0.42% 0.50%
Nonperf. assets/loans + OREO 0.58% 0.70%
Leverage cap. ratio 6.08% 6.93%
Tier 1 cap. ratio 6.76%* 7.89%
Tier 1+2 cap. ratio 10.50%* 12.50%
* Estimated
Fleet Financial Group
Boston
Dollar amounts in millions (except per share)
Net income $450.0 $393.0
Per share 0.74 0.65
ROA 1.65% 1.59%
ROE 19.38% 18.97%
Net interest margin 4.42% 4.60%
Net interest income 1,031.0 981.0
Noninterest income 1,036.0 809.0
Noninterest expense 1,178.0 1,017.0
Loss provision 146.0 118.0
Net chargeoffs 146.0 118.0
Year to Date 1999 1998
Net income $888.0 $716.0
Per share 1.45 1.18
ROA 1.64% 1.51%
ROE 19.33% 17.51%
Net interest margin 4.50% 4.67%
Net interest income 2,073.0 1,919.0
Noninterest income 1,995.0 1,504.0
Noninterest expense 2,303.0 2,014.0
Loss provision 295.0 210.0
Net chargeoffs 295.0 210.0
Balance Sheet 6/30/99 6/30/98
Assets $106,948.0 $100,713.0
Deposits 66,344.0 66,992.0
Loans 75,287.0 66,754.0
Reserve/nonp. loans 559.42% 490.82%
Nonperf. loans/loans 0.41% 0.47%
Nonperf. assets/assets 0.30% 0.33%
Nonperf. assets/loans + OREO 0.42% 0.50%
Leverage cap. ratio 7.27% 7.05%
Tier 1 cap. ratio 6.94% 6.80%
Tier 1+2 cap. ratio 11.05% 10.84%
State Street Corp.
Boston
Dollar amounts in millions (except per share)
Net income $123.0 $109.0
Per share 0.75 0.66
ROA 0.91% 1.00%
ROE 20.30% 20.50%
Net interest margin 1.61% 1.96%
Net interest income 190.0 178.0
Noninterest income 575.0 493.0
Noninterest expense 577.0 507.0
Loss provision 4.0 4.0
Net chargeoffs 1.0 0.0
Year to Date 1999 1998
Net income $245.0 $215.0
Per share 1.49 1.30
ROA 0.46% 1.03%
ROE 20.50% 20.80%
Net interest margin 1.68% 2.02%
Net interest income 388.0 358.0
Noninterest income 1,127.0 956.0
Noninterest expense 1,134.0 981.0
Loss provision 8.0 9.0
Net chargeoffs 4.0 0.0
Balance Sheet 6/30/99 6/30/98
Assets $53,330.0 $46,711.0
Deposits 32,782.0 29,421.0
Loans 7,303.0 6,044.0
Reserve/nonp. loans 517% 1,069%
Nonperf. loans/loans 0.23% 0.14%
Nonperf. assets/assets 0.04% 0.02%
Nonperf. assets/loans + OREO 0.28% 0.18%
Leverage cap. ratio 5.30% 5.90%
Tier 1 cap. ratio 12.80% 14.10%
Tier 1+2 cap. ratio 13.00% 14.40%