Sale of credit card debt fuels First Md.'s profits Earnings surge 59%, due mainly to Chase buying $360 million

October 23, 1997|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

First Maryland Bancorp's third-quarter earnings surged 59 percent ahead of last year to $53.5 million, the Baltimore banking company reported yesterday.

But the gain by the wholly owned subsidiary of Dublin, Ireland's Allied-Irish Banks PLC was fueled primarily by the sale of $360 million in credit card loans, a move that significantly boosted its results.

Without the loan sale to Chase Manhattan Corp. and the after-tax gain of $17.4 million, First Maryland's net income would have risen just 10 percent for the three months ended Sept. 30, to $36.1 million.

The Chase Manhattan loan sale benefited First Maryland's results for the first nine months of 1997 as well. Through the first three quarters of the year, the company generated earnings of $123.5 million, a 28 percent increase over the comparable period last year.

Excluding the loan sale, First Maryland's earnings for the nine months would have risen just 10 percent, to $106 million.

But the Chase Manhattan deal wasn't the only factor contributing to First Maryland's increases. The banking company, with assets of $17.3 billion, also attributed the gains to its $1.4 billion acquisition in July of Dauphin Deposit Corp., a Pennsylvania banking company that furthers First Maryland's efforts to broaden its geographic and customer base.

"We have made significant progress in the integration of the Dauphin franchise while maintaining growth in our core retail, corporate and trust businesses," said Frank P. Bramble, First Maryland's president and chief executive officer. "First Maryland remains well capitalized after this acquisition and well positioned to build on our leading market share in the Harrisburg-Baltimore corridor."

First Maryland also benefited from strong growth in the quarter in retail and commercial lending, which were up 14.5 percent and 8.5 percent, respectively. The company also reported a 12 percent increase in deposit service charges in the quarter over the same period in 1996, and a 22 percent increase in trust and investment advisory fees.

Analysts said that First Maryland's results were essentially in line with expectations.

"They were just slightly behind what we were looking for, which was earnings growth of 11 percent or 12 percent, stripping out the gains from the credit card loan sale," said Emer Lang, a Davy Stockbrokers analyst in Dublin. "But we're not concerned about their full-year numbers. Their retail and commercial lending growth is strong, and they seem to be well on track."

In all, First Maryland operates 291 branches from southern Pennsylvania to Northern Virginia under the First National Bank of Maryland, Dauphin Deposit Bank & Trust Co., York Bank & Trust Co. and First Omni Bank N.A. brand names.

Pub Date: 10/23/97

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