Led by FleetBoston’s record net income – a 51 percent jump from a year ago – area publicly traded banks are reporting strong first quarters, attributed by some to new customers won in the wake of Fleet and Bank Boston’s merger, and the arrival of Sovereign Bancorp. As of mid-week, FleetBoston, Bank Rhode Island and First Financial were all reporting earnings up more than 10 percent for the quarter.
This growth comes in a banking environment in Rhode Island – and throughout New England – that is undergoing its greatest changes in years. With the merger of Fleet and Bank Boston and the sale of a number of branches, primarily to Sovereign Bancorp, the financial services business, always competitive, has become even more competitive.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
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From Citizens Bank, which did not report its quarterly earnings last week, to the community banks, executives were reporting brisk business in the aftermath of the conversion of BankBoston branches in Rhode Island to Sovereign.
As Sovereign attempts to establish its name, and hurdle some early glitches in the transition, other banks have stepped up their marketing campaigns to convince former BankBoston customers that their fortunes would be better served at their particular institutions.
Bank Rhode Island president and chief executive officer, Merrill Sherman pointed to new products and “the current banking environment” as the movers in creating what she called a “great first quarter.”
Here are the reports from FleetBoston, Bank Rhode Island and First Financial Corp.
FleetBoston
BOSTON – Demonstrating what Terry Murray, FleetBoston chairman, says is the combined strength of Fleet Financial and BankBoston into the new merged company, FleetBoston last week announced record first quarter net income of $957 million, up 51 percent from the prior year.
The company said the quarter included divestiture gains and merger related after-tax expenses of $149 million that were related to the divestiture of some $4 billion of loans and deposits to Sovereign Bancorp and other expenses related to the Fleet-BankBoston merger. Exclusive of these items, the bank reported operating net income of $808 million, up 28 percent over the previous year.
“The merged company has outperformed all expectations,” Murray said. “The results for this quarter are indicative of the growth and revenue generating capacity of our new company.”
President and chief operating officer Chad Gifford also said the company was aware of the “dramatic changes that e-commerce is generating” and that the company is positioning itself to profit from this area. Also, he said, the company expects to benefit in the emerging growth sector from its relationship with Robertson Stephens and Investing, Fleet’s San Francisco based investment banking operation, and from anticipated continued investment growth from its brokerage arm, Quick & Reilly.
Here are some of the highlights of the FleetBoston results:
Total revenue, excluding net gain from the divestitures to Sovereign, was $4.1 billion, up 26 percent.
Nonperforming assets were $886 million, or .75 percent of total loans on
March 31, 2000, compared to $841 million, or .70 percent of loans on Dec. 31, 1999.
Total assets on March 31 were $187.8 billion, compared with $190.7 billion on Dec. 31, 1999 and $181.9 billion on March 31, 1999.
Net income from commercial and retail banking, which includes consumer and small business banking within the Northeast, middle market lending, asset based lending, leased and other commercial banking services was $320 million, up 14 percent.
Net income from international operations was $90 million, up 30 percent
Investment Services, which includes Quick & Reilly and the corporation’s asset management business, posted net income of $121 million, up 49 percent.
Bank Rhode Island
RECORD EARNINGS reported at BankRI
PROVIDENCE – Bank Rhode Island reported first quarter net income up 47 percent to $1.3 million, the third consecutive quarter the bank has posted record earnings.
Earnings per share rose 52 percent to 35 cents per share. The bank also saw dramatic increases in commercial loans, total assets and core deposits. Commercial loans grew $18.3 million to $192.9 million; assets jumped $27.4 million to $659.2 million; total deposits were up $39.4 million to $552.8 million; and core deposits grew by $19.3 million.
To put the quarterly figures in perspective, the bank’s total asset growth in all of 1999 was $36 million. For the quarter just ended it was $27.4 million. And the $19.3 million growth in core assets for the quarter surpassed all of last year, the bank said.
”It was a great first quarter,” said president and chief executive officer Merrill W. Sherman. “Everything came together for us. New products, special product offers and the current banking environment has led a tremendous number of new customers to Bank Rhode Island.
”We have been growing steadily since we opened our doors four years ago,” Sherman said. “But this level of growth is unprecedented.”
First Financial Corp.
HAPPY BANKER is Patrick J. Shanahan Jr. of First Financial Corp.
Calling it the bank’s “strongest first quarter in the Company’s history,” First Financial Corp. president and chief executive officer Patrick J. Shanahan, Jr. reported record first quarter earnings.
The bank reported net income of $48,740 for the quarter that ended March 31, a 10.1 percent increase over the same period a year ago. Total assets jumped 19.3 percent, to $170.2 million; and total deposits were up 25.2 percent to $129.5 million.
“We are delighted in reporting the strongest first quarter in the company’s history and the excellent acceptance of new deposit product offering sand related promotional activities,” Shanahan said. “The increase in assets during the quarter demonstrates our solid position within the community as a banking alternative to the merger and acquisition activity or area financial institutions. We have increased our customer base, strengthened our presence in the community and solidified our ability to fund future loan portfolio growth.”
The bank also reported total loans up 9.2 percent to $97.7 million, and shareholders’ equity up to $15.5 million, from $14.6 million a year ago.
