Northeast banks and thrifts kept costs down, and asset quality high, and made investments in their businesses to post strong fourth-quarter earnings results.
Stanley Wells, an analyst with Keefe, Bruyette & Woods Inc., said banks in the region managed their balance sheets well and had better earnings quality than they've shown in the recent past. "The fundamental trend has been good asset quality across the board," Mr. Wells said.
State Street Boston Corp. earned $78 million in the fourth quarter, up 20%. Earnings per share were 95 cents, beating analysts' consensus estimates by 2 cents. Total revenue grew by 20% to $501 million, partially due to the purchase of an insurance company and an investment management firm. "State Street continues to attract new business, and their mutual fund customers have been a major part of their income," said Standard & Poor's equity group analyst Stephen Biggar.
HSBC Americas Inc., the parent company of Buffalo-based Marine Midland Bank, said fourth-quarter net income was up 61% to $104.2 million. Net interest income was $255.5 million, up 11.4%. Operating expenses were down 8.5% to $167.9 million. Total assets reached $23.6 billion, from $20.6 billion in the same period of 1995, due to branch acquisitions and the purchase of J.P. Morgan & Co.'s U.S. dollar clearing business.
Despite merger-related restructuring charges and some investments in supermarket branches. Summit Bancorp reported 26% growth in fourth-quarter net income to $82.1 million. The $22.6 billion-asset bank, based in Princeton, N.J., earned 88 cents per share in the quarter, 2 cents below analysts' consensus estimates.
Analyst Elizabeth A. Summers, of Ryan Beck & Co., said Summit should take advantage of its supermarket branch agreement to boost revenues.
New York City-based Dime Bancorp posted a whopping gain in fourth- quarter net income to $31.3 million. But the jump was mostly due to a one- time $22.9 million restructuring charge taken in the fourth quarter of 1995. Per-share results of 29 cents were 2 cents below analysts' consensus estimates. The $18.9 billion-asset thrift reported an improvement in the net interest margin to 2.51%, up 46 basis points.
People's Bank, of Bridgeport, Conn., posted profits of $20.6 million for the quarter, up 10%. The $7.6 billion-asset thrift credited strong growth in its credit card receivables for earnings per share of 50 cents. The results, up 4 cents per share, met analysts' consensus estimates. People's said its partnership with a United Kingdom credit card company helped generate $50 million in credit card receivables of a total $800 million in domestic and foreign receivables.