Big Bank Firms Post Mixed Results
Two of the nation’s biggest bank holding companies--Citicorp and Manufacturers Hanover--on Tuesday reported profit declines in the second quarter, while three other major banking firms posted earnings gains.
But a leading Texas banking company, InterFirst Corp., posted a second-quarter loss of $281.1 million because of a previously announced, huge provision for possible bad loans. InterFirst blamed low oil and gas prices, a weak real estate market and a depressed Southwestern economy.
Both Citicorp, the biggest U.S. banking company, and No. 4 Manufacturers Hanover cited big increases in their provisions for possible bad loans as depressing their quarterly earnings.
New York-based Citicorp’s earnings dropped 6.4% to $235 million in the three months ended June 30 from $251 million a year earlier.
Manufacturers Hanover, also based in New York, posted second-quarter net income of $93.9 million, down 4.7% from earnings of $98.5 million a year earlier.
Among banking companies posting second-quarter profit gains were Security Pacific, the nation’s seventh-largest bank, with an 18.1% increase; No. 12 Continental Illinois, which was up 9%, and No. 13 Wells Fargo, which rose 39.2%.
InterFirst, which ranked as the 19th-largest banking company in the nation at the end of 1985, had posted net income of $16.1 million in the second quarter a year ago.
Its provision for loan losses was $328.2 million, up from $32.9 million a year earlier. Its loan loss reserve was $510 million at June 30, or 3.56% of loans outstanding, compared to 1.81% a year earlier.
Security Pacific, based in Los Angeles, said its second-quarter profit rose to $93.5 million from $79.2 million a year ago.
Continental Illinois, based in Chicago, said its second-quarter net income was $40.5 million, compared to $37.3 million a year ago.
The corporation is parent to Continental Illinois National Bank & Trust Co. of Chicago, which the federal government rescued from near-collapse in 1984.
Wells Fargo, based in San Francisco, said its second-quarter net income rose to $66.1 million from $47.5 million a year earlier. The latest results included one month of the operations of Crocker National Corp., also of San Francisco, which Wells Fargo acquired from Midland Bank PLC of London on May 30.
