BankAmerica Corp., continuing its financial recovery, on Thursday reported an 88% jump in second-quarter earnings, its third consecutive quarter of record profit.
Gains in domestic loans and interest income and a lid on expenses helped the parent company of Bank of America show earnings of $304 million for the quarter that ended June 30. Profit for the same period a year ago was $162 million.
Frank Newman, BankAmerica's chief financial officer, called the results "a very solid performance" that reflected progress in several key areas.
"It's a very powerful set of arithmetic. . . . It's a combination of not overly ambitious growth in revenue coupled with control over the rate of expenses," he said. "That combination can be very powerful indeed."
BankAmerica's stock closed Thursday on the New York Stock Exchange at $28.50, down 37.5 cents a share from Wednesday, but about four times its low price of $6.62 in 1987.
Both the company and analysts forecast continued improvement for BankAmerica, which came back from a loss of $955 million in 1987 to post a $726-million profit last year.
For the first half of 1989, the nation's second-largest bank holding company reported earnings of $579 million, up 114% from the $271 million reported for the first six months of 1988.
"The ranks of doubters has to be thinning. There can't be many people who can question the recovery," said Dan Williams, an analyst with Sutro & Co. of San Francisco.
"It's a genuine recovery. It has further to go, but I think the bank will continue to perform well relative to its group," he added.
BankAmerica said its second-quarter results reflect continuing strength in several key areas, including expansion of domestic loans and deposits, particularly in consumer loan and mortgage portfolios.
Consumer loans were up 29% to $16.1 billion from $12.5 billion, and home loans rose 28% to $11.4 billion from $8.9 billion.
Brazilian cash interest payments helped boost BankAmerica's net interest income to $1.03 billion from $810 million for the second quarter of last year. Excluding the Brazilian interest payments, net interest income rose $172 million.