NationsBank profit for quarter up 29% to $818 million Acquisitions, fee income credited

rise for year 30%


January 13, 1998|By Bill Atkinson | Bill Atkinson,SUN STAFF pbA

NationsBank Corp.'s net income shot up 29 percent in the fourth quarter, driven by acquisitions and higher fees from investment banking, deposit accounts and brokerage operations, the company said yesterday.

Net income rose to $818 million in the quarter that ended Dec. 31, 1997, or $1.15 a share, compared with $632 million, or $1.09 a share for the same period a year earlier.

The earnings were boosted by several large acquisitions. Last year, Charlotte, N.C.-based NationsBank acquired Boatmen's Bancshares Inc. of St. Louis and San Francisco-based Montgomery Securities Inc.

This month, it closed a deal to buy Barnett Banks Inc. of Jacksonville, Fla., for $15.5 billion in stock.

"I was impressed," said Joan T. Goodman, a bank analyst at Chicago-based Pershing, a division of Donaldson Lufkin & Jenrette. "I thought they were quite good con- sidering the large acquisitions they have made. I think they [earnings] will be even better next year."

For the year, net income jumped 30 percent to $3.08 billion compared with net income of $2.38 billion in 1996.

Earnings per share rose 7 percent, to $4.27 per share, in 1997, compared with $4.00 in 1996. Excluding a merger-related charge in the first quarter of 1996, operating net income and earnings per share for 1996 was $2.45 billion and $4.13 respectively.

"Combined with last week's merger with Barnett, we enter 1998 with added momentum," said Hugh L. McColl Jr., chief executive of NationsBank, the country's third-largest banking company with $310 billion in assets.

NationsBank entered Baltimore in 1993, buying MNC Financial Inc. It has 202 branches, 558 ATMs and about 4,600 employees in Maryland. It operates in 16 states and the District of Columbia.

NationsBank's strong performance was helped by rising loans, which grew to $142.7 billion in 1997, up 17.4 percent for the same period a year earlier.

Net interest income, which is generated largely from loans and investments, was up 25 percent to $2.02 billion in the quarter compared with a year earlier.

Noninterest income, or income from brokerage, investment banking and deposit accounts, soared 57 percent to $1.50 billion in the quarter.

NationsBank had $62 million in gains from the sale of securities in the quarter, up from $33 million the same time a year earlier.

The company's loan portfolio remained strong with $1.14 billion in loans listed as nonperforming, or 0.79 percent of NationsBank's total loan portfolio.

Goodman expects NationsBank to continue growing through acquisition.

"They should push to the West Coast to really do the full deal," she said. "I think their move with Boatmen's and Barnett was spectacular."

Pub Date: 1/13/98

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