Allfirst Financial posts 10.7% higher earnings

An analyst admires bank's third quarter in a slowing economy

November 15, 2001|By Bill Atkinson | Bill Atkinson,SUN STAFF

Allfirst Financial Inc.'s profit grew 10.7 percent in the third quarter, fueled by higher revenue from products and services that charge fees to customers and by sharply lower costs on deposits, the company reported yesterday.

The Baltimore subsidiary of Allied Irish Banks PLC of Dublin made $51.7 million in the three months that ended Sept. 30, compared with $46.7 million in last year's third quarter.

In the first nine months of the year, Allfirst made $149.1 million, up 7.5 percent from the corresponding period a year earlier.

"It is actually a good performance from Allfirst in the context of a rapidly slowing economy," said Seamus Murphy, a bank analyst at Merrion Stockbrokers in Dublin.

Profit in the quarter was higher partly because of revenue generated from products and services the bank sells. This revenue, called noninterest income, jumped 22.1 percent to $104.8 million in the quarter.

Allfirst took in $10.4 million in "consulting income," mainly from Community Counselling Service Co., the largest consulting firm to nonprofit businesses worldwide, which Allfirst acquired in May.

The banking company also made $28.7 million on service charges on deposit accounts, up nearly 13 percent from a year earlier.

Falling interest rates also helped. Total interest expense, mainly paid on deposits, fell 34.2 percent to $108.7 million in the quarter.

"We managed to get through to the end of September unscathed and in good shape," said Maurice Crowley, Allfirst's chief financial officer.

Murphy said the quality of Allfirst's loan portfolio has held up well compared with other banks that have seen bad loans grow.

Allfirst's nonperforming assets - generally loans that are late 90 days on either interest or principal - were $87.9 million as of Sept. 30, compared with $107.5 million on Dec. 31.

"Overall, it is an encouraging performance," Murphy said.

Crowley said the company is continuing to reduce some types of loans. As a result, Allfirst's assets slipped to $17.7 billion as of Sept. 30, down from $18.4 billion on Dec. 31. Loans were down to $10.6 billion from $10.8 billion, and deposits fell to $11.6 billion from $12.7 billion.

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