NationsBank sets earnings record $530 million profit made in 3rd quarter

October 17, 1995|By BILL ATKINSON | BILL ATKINSON,SUN STAFF

NationsBank Corp. surprised Wall Street yesterday as it reported earning a record $530 million in the third quarter, up 23 percent from a year ago, as profits were boosted by strong growth in consumer and commercial loans and fee income.

Earnings per share were up 26 percent to $1.95 in the quarter, compared with $1.55 per share a year ago.

"I looks like they are getting into Olympic form," said Michael L. Mayo, a bank analyst with Lehman Brothers, referring to the bank's sponsorship of the 1996 Olympics. "We hadn't been anticipating a strong quarter."

Mr. Mayo expected earnings of $1.87 per share, while estimates by other analysts were in the $1.80 range, he said. Mr. Mayo is projecting earnings per share to reach $7.10 for the year, and $8.05 for 1996.

NationsBank's stock closed at $71.25, down 37 cents.

NationsBank -- currently the third largest banking com-pany in nTC the country -- earned $1.4 billion for the nine months, or $5.26 per share, up from $1.3 billion, or $4.66 per share a year ago.

"The earnings momentum of our company is obvious in this quarter's outstanding results," said Hugh McColl, chairman and chief executive of the Charlotte, N.C.-based company. "Strong revenue growth and excellent expense control are driving the profitability and efficiency improvements that this company is capable of producing."

Total loans, which jumped 16.4 percent to $113 billion, were fueled by increases in consumer and commercial loans. Noninterest income rose 20 percent to $776 million in the quarter. It was driven by growth in capital markets revenues, deposits fees and fees from a growing mortgage servicing operation.

Total deposits were flat at $98 billion, but total assets jumped 6.6 percent to $182 billion.

Noninterest expense rose just 1 percent to $1.25 billion from a year ago, reflecting acquisitions and increased personnel and marketing spending.

It was offset by a $37 million decline in insurance premiums paid to the Federal Deposit Insurance Corp., and an $11 million refund from second-quarter insurance payments.

NationsBank had 58,370 "full-time equivalent," which includes part-time and full-time employees, down from 59,600 a year ago.

The company employs about 14,000 people in its mid-Atlantic region, which includes Maryland, Virginia and Washington, D.C. On Sept. 29, NationsBank received approval from a federal regulator to consolidate the region into the Charlotte office.

Tight expense controls helped NationsBank post a 56.7 percent efficiency ratio -- the amount of money spent to generate $1 of profits -- compared with 65 percent for all publicly traded banks.

"Nationsbank will be one of the megabanks that you will see still surviving," said Vernon Plack, an analyst with Scott & Stringfellow Inc. in Richmond, Va.

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