Allfirst reports `solid' second quarter

Former 1st Maryland netted $37.6 million after $6 million charge

August 05, 1999|By Greg Schneider | Greg Schneider,SUN STAFF

Allfirst Financial Inc., which until June was known as First Maryland Bancorp, reported second-quarter net income of $37.6 million yesterday, down from $47.5 million posted for the corresponding period in 1998.

Much of the drop stemmed from a $6.1 million after-tax charge taken during the quarter to cover expenses related to the name change, Allfirst said.

The charge involved changes to signs, bank forms, stationery, computer systems and more to reflect the new name and logo.

A spokeswoman for the Baltimore financial institution said the changes should wind up producing long-term savings, though, because the new identity unifies the parent bank and six subsidiaries that all had different names.

Allfirst itself is a subsidiary of Allied Irish Banks PLC of Dublin, Ireland.

Factoring out the name cost and other one-time factors such as discontinued businesses and security gains and losses, adjusted net income from continuing businesses was $44.2 million for the quarter.

Foreign maritime loans continued to perform poorly. Charge-offs and collection-related costs totaled $8.2 million for the quarter, compared with $3.2 million during the second quarter of last year.

Those costs lowered after-tax net income by $3.1 million for the 1999 period, but Allfirst said the portfolio showed signs of improvement and should carry lower costs for the rest of the year.

"We are pleased with our second-quarter performance," said Frank P. Bramble, Allfirst's chairman and chief executive officer.

"Business volumes are up across our franchise and noninterest income continues to grow," Bramble said.

The company showed loan growth in several areas for the quarter. Commercial loans increased 13 percent on average compared with the same portion of 1998, while commercial real estate loans were up 8 percent and retail loans rose 6 percent.

Noninterest revenue climbed 18.9 percent in the quarter compared with the year-before period, boosted by growth in trust and investment advisory fees, trading income, fees from securities sales and lease residual gains.

Calling the overall results "solid," Bramble said Allfirst is on its intended course.

"We now have a consistent brand name and a technologically refreshed company that positions us well to serve the diverse financial needs of our customers," he said.

Allied Irish's American depositary shares lost 87.5 cents yesterday to close at $24.50.

Pub Date: 8/05/99

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