Marine Midland Banks Inc. posted a 54% increase in first-quarter earnings over last year to $52.6 million, the Buffalo, N.Y., bank reported Tuesday.

The bank, a wholly owned subsidiary of HSBC Holdings PLC in Hong Kong, attributed the earnings to a 16% increase in net interest income. Net interest income went from $160 million last year to $186.4 million for the first quarter.

Morgan Stanley analyst Nick Collier said Marine Midland "continued to benefit from its full provisioning in previous years for its problem portfolio."

Continued Improvement Seen

This strategy has allowed the bank to record no provision for loan losses for the second year in a row. Reserves were 126% of nonaccruing loans.

Return on average assets was 1.26%, up from 0.83% last year. Return on average common equity rose to 16% from 11.8% last year.

The levels of total assets and total deposits remained flat. Assets increased 1.1% to $17 million. Deposits increased 1.8% to $13 million.

Loans also remained relatively flat, increasing 2.5% to $10.5 million.

Mr. Collier said he expects the bank's earnings to continue to improve as long as the New York State economy does the same.

Anchor Declines

Another New York state bank also reported earnings Tuesday. Anchor Bancorp, the parent company of Anchor Savings Bank FSB, posted $11.3 million in net income for the quarter, the third of its fiscal year.

That compares with a $16.3 million gain in the same period of last year.

The Hewlett-based company, which has a different quarterly schedule than most banks, explained the decline in net income was partially due to an unusually strong 1993, which was boosted by $2.9 million earned from preferred stock dividends.

SNL Securities analyst Scott Winslow said the bank's net income was lower this year than the same period a year ago as a result of the recent boom in mortgage refinancing.

Signs of Strength

Mr. Winslow said that despite lower earnings, the bank still appears strong. General and administrative expenses declined to $28.6 million, or 1.37% of assets.

Asset quality improved as nonaccrual loans and real estate owned assets declined to 0.46% of total assets, down from 0.70% a year ago.

The bank reduced its quarterly loan loss provision as charge-offs slowed. The allowance for credit losses is now 125% of non-accrual loans.

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