Profits Up at 2 Major Banks in 1st Quarter

Chemical New York and Marine Midland Bank, two money-center banking companies, reported double-digit gains Thursday in first-quarter earnings. They each credited growth in interest income.

Chemical, the nation’s sixth-largest bank holding company, said strong gains in service fees and foreign-exchange trading profits also contributed to a 10.3% profit increase in its first quarter.

Marine Midland, which ranks as the 17th-largest banking company, said its non-interest income also grew and contributed to a 14.4% profit gain.

Chemical and Marine Midland were among the first major banking companies to report earnings for the first three months of 1985.

“The earnings look decent this quarter,” said Stephen Berman, a banking industry analyst for the investment firm L. F. Rothschild, Unterberg, Towbin. But he said his long-range view is that the first-quarter earnings’ results may prove to be the best of the year.

Chemical, the parent of the nation’s sixth-largest bank, Chemical Bank, said its net income was $89.7 million in the first three months of the year, compared to $81.3 million a year ago.

It said the Town & Country credit-card business that it acquired in April, 1984, also contributed to the company’s earnings improvement.

The company had losses in the quarter on its trading-account activities and sales of investment securities, however, and it had higher non-interest expenses.

Net interest income rose 14.3% to $457.2 million, principally due to higher domestic loan volume.

Chemical said the difference between average rates it must pay for funds and the rates at which it was able to lend or invest them widened to 3.90 percentage points from 3.76 percentage points in the first quarter of 1984.

Rothschild’s Berman said the rise in net interest income was “the main reason” for the company’s improved performance. He said increases in fees and foreign-exchange trading profits tended to be offset by higher expenses and bond-trading losses.

Chemical said that “a negative factor” for the quarter was that its level of non-accruing, or renegotiated, loans rose to $1.26 billion as of March 31 from $899 million a year ago and $1.196 billion at the end of 1984. Non-accruing loans generally include those on which payments of principal and interest are at least 90 days past due.

Its loan-loss reserve amounted to $456.4 million on March 31, compared to $383.9 million a year ago and $454.2 million at the end of 1984.

Chemical’s assets were $55.7 billion on March 31, compared to $53.0 billion a year ago and $52.2 billion on Dec. 31, 1984.

Marine Midland, parent of the nation’s 12th-largest bank, Marine Midland Bank, said its profit rose to $25.9 million for the first quarter from $22.6 million a year earlier.

Its net interest income rose 15.4% to $184 million, and the difference between the average rates it paid for funds and what it got for lending or investing them widened to 3.39 percentage points from 2.62 percentage points a year ago. Non-interest operating income rose 24.8% to $63 million, with most of the gain resulting from improved bond-trading results and investment securities sales.

Marine Midland’s non-accruing and reduced-rate loans were $526 million on March 31, compared to $501 million at the end of 1984 and $430 million a year ago.

Its loan-loss reserve was $219 million on March 31, compared to $200 million at the end of December and $157 million a year ago.

Marine Midland’s assets were $22 billion on March 31, unchanged from Dec. 31, 1984, and down from $24 billion a year earlier.

Pacific Lighting Posts Profit of $49.8 Million

Pacific Lighting reported first-quarter profits of $49.8 million, a 15% improvement over a year ago.

The Los Angeles-based parent of Southern California Gas attributed the earnings gain to strong showings in all of its operations, including natural gas distribution, oil and gas production and land development. Utility operations accounted for 73% of Pacific Lighting’s income in the quarter ended March 31, compared to 79% last year.