Cost-cutting helps profit soar 30% at Allfirst

Higher loan volume, trust income also boost 3rd-quarter figures

Financial industry

November 04, 1999|By Bill Atkinson | Bill Atkinson,SUN STAFF

Allfirst Financial Inc. reported yesterday that profit climbed 30 percent in the third quarter, spurred by cost-cutting, higher volume of commercial and retail loans, and higher income from its trust and investment advisory business.

Allfirst, the Baltimore-based subsidiary of Allied Irish Banks PLC of Dublin, made $48 million in the quarter that ended Sept. 30, up from $37 million for the corresponding period a year earlier.

"I thought they were good figures," said Scott Rankin, an analyst at Davy Stockbrokers in Dublin. Allfirst's profit in the quarter beat his estimates by $3 million, he said..

In the first nine months of the year, Allfirst made $122.4 million, down from $174 million for the corresponding period a year earlier. Profit in the period last year was boosted by several one-time gains, including a $26 million gain on the sale of securities and a $37.4 million gain on the sale of the company's credit card portfolio.

Excluding those gains, profit was up 14 percent in the first nine months of this year, the company said.

"Clearly, I'm very pleased with the performance of the company," said Susan C. Keating, Allfirst's president and chief operating officer. "The effort that has been put in the last couple of years, building and rebuilding the direction of the company, is beginning to take hold."

Allfirst, previously known as First Maryland Bancorp, changed its name in April to reflect its much greater size. The company's flagship bank, Allfirst Bank, has 250 branches in Maryland, Pennsylvania, Delaware, Washington and Virginia.

Keating also noted that the bank's portfolio of loans to shipping companies, which totals $233 million, has improved.

The company wrote off $19.4 million in shipping loans in last year's fourth quarter. "We have really made progress, and the maritime business is clearly improving," she said.

"At this point, what we are doing is managing the business very carefully."

Boosting Allfirst's third-quarter profit was $23 million in revenue from service charges on deposit accounts and $20.7 million from trust and investment advisory fees.

Expenses fell 14 percent to $125.8 million, with salaries and other personnel costs down 12 percent to $67.9 million.

Allfirst's assets were $17.99 billion at the quarter's end, 3.8 percent more than for the corresponding period last year. Loans rose 5.9 percent to $10.8 billion, and deposits were up 4.8 percent to $12.3 billion.

Allfirst's total nonperforming assets, primarily loans that are past due on principal or interest payments, were $87 million in the quarter, down from $93 million three months earlier. The nonperforming assets account for 0.79 percent of Allfirst's loans and other assets.

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