Security Pacific Posts 12% Increase in Profit

Security Pacific Corp. said its first-quarter profit rose 12%, despite a $7.2 million after-tax cut in earnings because loans to Brazil and Ecuador were reclassified.

The nation’s sixth-largest banking concern netted $98.6 million for the three months ended March 31, compared to the year-earlier period when it earned $87.9 million.

Security Pacific has placed $401 million in loans to Brazil and $73 million in loans to Ecuador on non-accrual status, meaning interest isn’t recorded on the bank’s books until it is received, not when it is due.

The action reduced Security Pacific’s interest income by $13.2 million for the quarter.

The most recent quarter also included the results of Security Pacific’s acquisition of Arizona BancWest Corp. and the consolidation of Hoare Govett Ltd.

Expansion of the Los Angeles-based company’s merchant banking activities caused a 35% increase in non-interest income to $396.4 million. Interest income was up 10%, to $485.5 million.