Fourth-quarter earnings rise 18% for Mercantile Net interest income, loans help spur gain

January 23, 1996|By Bill Atkinson | Bill Atkinson,SUN STAFF

Mercantile Bankshares Corp.'s fourth-quarter earnings jumped 18 percent to $26.9 million, the company said yesterday.

The Baltimore banking company, which is the city's largest independent with $6 billion in assets, earned 56 cents a share for the fourth quarter ended Dec. 31, up from 48 cents the same time in 1994.

The company earned $104.4 million for 1995, or $2.19 a share, compared with earnings of $90.4 million, or $1.88, in 1994.

"They are very solid and very consistent," said Vernon C. Plack, a bank analyst with Scott & Stringfellow. "The market pays for consistency, and they are a high-quality company."

Michael Coiro, a bankinganalyst at Johnston, Lemon Inc., said Mercantile's $2.19 a share was on target with his estimates. He believes that the company will earn $2.40 for 1996.

Mercantile's stock closed yesterday at $27 a share, up 25 cents on the news.

Average loans grew by 8 percent for the year to $4.1 billion, and Mercantile's net interest income was up 9 percent to $286.8 million. The increase was due in part to a 5 percent increase in the company's net interest margin, a ratio that shows how much a bank earns on loans and investments after interest payments to depositors and creditors.

Income from fee-based services fell 4 percent, primarily because of a one-time gain of $3.1 million on the sale of an asset, and higher mortgage-banking fees in 1994. A company spokesman declined to elaborate on the asset sale.

Mercantile wrote off $10.7 million in loans for the year, up 27 percent from 1994.

Charge-offs in the fourth quarter were down 75 percent, to $1.5 million.

Mr. Coiro said Mercantile has kept bad loans to a minimum at a time when many banks are experiencing rising problems with consumer credit.

Total nonperforming assets, for example, fell 45 percent to $24 million in 1995, compared with the year-ago figures.

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