Volatile financial markets figured heavily in the latest batch of
First Union Corp., citing hefty gains from capital markets activities
But J.P. Morgan & Co. said its earnings slid 3%, largely because of
Though disparate, the results at each company beat analysts'
The reports set the tone for a wave of earnings releases due next week,
"We are expecting the four C's: earnings consistency, capital strength,
J.P. Morgan, the nation's fourth-largest bank, reported a 5% gain in
"Revenues were up thanks to the strength and global diversification of
The bulk of the gains came from proprietary trading and investing, where
But revenues from market-making activities declined 5%, to $733 million.
The company said revenues from equity investments fell 26%, to $49
J.P. Morgan, like some regional banks, continued to find success in
The $226 billion-asset company reported 8% growth in revenues from
The bank ranks fourth in U.S. debt and equity underwriting, up from
In general, analysts were pleased by Morgan's results.
"They came in on the high side," said Raphael Soifer, an analyst at
But some observers said the bank, which has always relied heavily on its
"We expect underwriting revenues to flatten out," said Lawrence W. Cohn,
At $137 billion-asset First Union, the results included a 5% increase in
"I was expecting a good increase (in fees), but this was better," said
First Union officials were particularly pleased with the capital markets
Overall, first quarter fee income, including securities transactions,
Capital management and capital markets "are the two big engines that we
Average net loans, which totaled $94.6 million in the first quarter,
One dark cloud for First Union was its rising credit card losses, which
Still, credit cards make up less than 6% of the company's outstanding
First Union Corp.
Charlotte, N.C.
Dollar amounts in millions (except per share)
First Quarter 1Q97 1Q96
Net income $471.0 $239.0*
Per share 1.67 0.85*
ROA 1.42% 0.75%*
ROE 19.58% 10.76%*
Net interest margin 4.37% 4.19%
Net interest income 1,303.0 1,237.0
Noninterest income 753.0 526.0
Noninterest expense 1,169.0 1,011.0*
Loss provision 145.0 70.0
Net chargeoffs 144.0 148.0
Balance Sheet 3/31/97 3/31/96
Assets $136,730.0 $130,581.0
Deposits 92,403.0 90,518.0
Loans 95,487.0 89,990.0
Reserve/nonp. loans 199% 197%
Nonperf. loans/loans 0.72% 0.81%
Nonperf. assets/assets 0.57% 0.64%
Nonperf. assets/loans + OREO 0.81% 0.93%
Leverage cap. ratio 6.13% 5.56%
Tier 1 cap. ratio 7.38% 7.00%
Tier 1+2 cap. ratio 12.10% 11.91%
*Includes merger-related charges
J.P. Morgan & Co. Inc.
New York
Dollar amounts in millions (except per share)
First Quarter 1Q97 1Q96
Net income $424.0 $439.0
Per share 2.04 2.13
ROA 0.73% 0.86%
ROE 15.70% 17.20%
Net interest margin 1.01% 1.03%
Net interest income 470.0 418.0
Noninterest income 1,383.0 1,344.0
Noninterest expense 1,191.0 1,085.0
Loss provision 1,113.0 1,117.0
Net chargeoffs (3.0) (13.0)
Balance Sheet 3/31/97 3/31/96
Assets $226,382.0 $204,747.0
Deposits 53,571.0 50,204.0
Loans 29,453.0 28,645.0
Reserve/nonp. loans 1,223.1% 716.0%
Nonperf. loans/loans 0.30% 0.50%
Nonperf. assets/assets 0.05% 0.08%
Nonperf. assets/loans + OREO NA NA
Leverage cap. ratio 5.90% 6.20%
Tier 1 cap. ratio 8.90% 8.30%
Tier 1+2 cap. ratio 12.60% 12.20%