Continental Illinois and J.P Morgan Post Gains

J. P. Morgan & Co., the nation’s fifth-biggest banking company, reported that its fourth-quarter profit rose 9.3%, while Continental Illinois Corp., ranked No. 14, reported that its earnings rose 14.2% in the fourth quarter.

Morgan, the parent of Morgan Guaranty Trust Co. of New York, said its fourth-quarter results were helped by an increase in net interest earnings, a lower provision for credit losses and lower income taxes than in the same quarter a year earlier.

Morgan reported its net income amounted to $190.1 million for the three months ended Dec. 31, compared to $174.0 million in the year-ago period.

Net interest earnings rose 4.7% to $517.5 million in the quarter, Morgan said, while tax law adjustments boosted its quarterly earnings by $27 million.

Morgan said its earnings for the year rose 23.7% to $872.5 million, compared to net income of $705.4 million in 1985.

Morgan ended the year with assets of $76.0 billion, up from $69.4 billion in 1985.

Continental Illinois said its fourth-quarter profit rose to $43.5 million, from $38.1 million a year earlier.

The Chicago banking company said its net interest income fell to $165.1 million in the fourth quarter from $187.5 million a year ago, partly due to lower net interest margins. Non-interest income rose to $101.5 million from $69.2 million.

Continental took a loan loss provision of $35 million, compared to $28 million a year ago. The loan loss reserve on Dec. 31 was $445 million, or 2.16% of loans outstanding, compared to $417 million, or 2.04% of loans outstanding, at the end of 1985.

For all of 1986, net income rose to $165.2 million, up from $150.5 million for 1985.

Continental said that during 1986 it transferred $459 million in poor-quality loans and other assets to the Federal Deposit Insurance Corp., including $234 million in the fourth quarter.