First Maryland reports 11% rise in profit Gains in lending, fees aid quarter's results

October 22, 1998|By Bill Atkinson | Bill Atkinson,SUN STAFF

First Maryland Bancorp said yesterday that net income rose 11 percent in the third quarter, driven by increased lending and a jump in fees paid to its trust operations.

The Baltimore-based banking company made $40.1 million in the Sept. 30 quarter compared with $36.1 million for the same period a year earlier. The year-ago results excluded a one-time gain of $17.4 million from the sale of credit card loans.

For the first nine months of the year, First Maryland made $120.2 million, up 13 percent, compared with adjusted net income of $106 million before one-time gains in both periods. Including the gains, the nine-month profit this year was $183.2 million vs. $123.5 last year.

"The underlying 11 percent earnings increase in the quarter reflects good growth in the core retail, corporate and trust businesses," said Tom Mulcahy, chief executive of Allied Irish Banks PLC, First Maryland's Dublin-based parent.

First Maryland is a key subsidiary for Allied Irish, with 300 banking offices in Maryland, Pennsylvania, Washington and Northern Virginia.

In the quarter, First Maryland's assets rose 1 percent to $17.3 billion, deposits fell 1 percent to $11.7 billion, and loans rose 5 percent to $10.4 billion.

The increase in lending was fueled by strong demand for business and consumer loans, which were up 14.5 percent and 8.9 percent respectively.

But Arnold Danielson, chairman of Danielson Associates Inc., a Rockville-based bank consulting firm, said it is becoming more difficult for banks to book loans because of intense competition.

"Loans aren't out there any more," he said. "If you want loans, you have to make them cheaper."

First Maryland's bottom line was also boosted by a sharp increase in fees from trust and investment advisory business, which jumped 25 percent to nearly $18 million in the quarter.

First Maryland's credit quality remained high, with delinquent assets rising 11 percent to $99 million -- about a half of a percent of the company's total assets.

During the quarter, First Maryland spent about $8 million upgrading its computer systems and preparing for the year 2000, the company said.

Pub Date: 10/22/98

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