B of A Reports Record Net for Quarter, Year : Earnings: Another bank, Calfed, narrowed its losses.
BankAmerica Corp., swollen by its acquisition of Security Pacific Corp., reported record profits Tuesday and confirmed plans to sell $1 billion in troubled real estate loans and properties.
Investors reacted favorably to the news, boosting B of A’s stock $2.25 a share to $53.625 in trading on the New York Stock Exchange.
The San Francisco-based banking giant--the nation’s second-largest bank behind Citicorp after absorbing Security Pacific in 1992--reported profits of $473 million in the final three months of 1992 and $1.49 billion for the entire year. Both were records.
The results jibed with estimates of industry analysts. The bank earned $285 million in the fourth quarter of 1991 and $1.12 billion for the entire year.
BankAmerica confirmed earlier reports that it has agreed to sell some problem real estate assets--most of them from Security Pacific that have been written down in value--to a fund managed by a subsidiary of New York-based Morgan Stanley Group.
The deal is expected to close in the second quarter. The bank said $1.7 billion is still owed on the loans.
One industry analyst noted that the bank’s non-performing loans--those on which interest is not being paid--went up less than expected, to $5.3 billion from $5.2 billion in the previous quarter.
“I think they’ve handled the bulk of the problem loans,” said Ronald I. Mandle, senior research analyst with Sanford C. Bernstein & Co. in New York.
But Richard Rosenberg, BankAmerica’s chairman and chief executive, injected a note of caution.
“The U.S. economy continues to recover slowly,” he said in a statement, “and in California, the corporation’s largest market, the economy remains weak, particularly in the southern part of the state.”
Meanwhile, Los Angeles-based California Federal Bank said it lost $45 million in the fourth quarter, compared to a $91.2-million loss in the 1991 period.
Calfed’s latest loss stemmed largely from a one-time, $51.4-million charge related to a debt-restructuring program completed in December.
For the year, Calfed lost $97.3 million, compared to a $170-million loss for 1991.
Calfed said it is continuing to suffer from California’s soft housing market, but added that higher fee income from its consumer banking activities and lower overhead allowed it to trim some losses from the year before.
