Profits Up Overall in Western States, Hawaii, and Alaska

By Luke, Robert | American Banker, January 20, 1986 | Go to article overview

Profits Up Overall in Western States, Hawaii, and Alaska


Luke, Robert, American Banker


LOS ANGELES -- Higher profits were reported in the quarter and the year ended Dec. 31 by several western banking companies, including Rainier Bancorp., Valley National Corp., United Bancorp of Arizona, and First Hawaiian Inc.

The Moore Financial Group said profits advanced in the quarter but declined in the full year, largely because of "unusual" charges in the first quarter.

Some Alaska banks reported lower results in the quarter and year. They blamed a slowing state economy.

The Seattle-based Rainier said its profits increased 16% in the quarter to $18 million, or 89 cents a share, a year earlier. In all of 1985, the parent of Rainier National Bank said profits climbed 6% to $65.2 million, or $3.26 a share, from $61.4 million, or $3.13 a share, a year earlier.

Chairman Robert G. Truex Jr. attributed the improved results to increased domestic lending, improved results from international operations, and growth of noninterest income.

Rainier said growth in consumer loans slowed, but climbed in the commercial, tax-exempt, and commercial real estate areas.

Earnings of Rainier National Bank, the company's principal subsidiary, advanced 9% from a year earlier to $15.4 million in the quarter and 9% to $60.1 million in the full year.

Earnings of Rainier Bank Alaska improved, despite a weakening in the Alaska economy, Mr. Truex said. The Alaska unit reported profits of $350,000 in the quarter, against $72,000 a year earlier. For the full year, the figures were $1.04 million, against $164,000 in 1984.

Earnings of Rainier Financial Services Co., the mortgage banking and insurance unit, rose 58% in the quarter but fell 9% in the full year. "The mortgage banking business has been difficult because of intense price competition and the effect of disinflation on real estate markets," Mr. Truex said.

Rainier said nonperforming assets totaled $223 million, or 2.7% of assets and 3.9% of loans and leases at Dec. 31, up from $220 million at Sept. 30. The provision for credit losses was $6 million in the quarter and $30.1 million in the full year, against $7.4 million and $28.4 million, respectively, a year earlier.

Rainier reported assets of $8.3 billion at Dec. 31.

Moore Profits Down for Year

In Boise, Idaho, the Moore Financial Group said Fourth-quarter earnings increased 17.9% to $6.8 million, or $1 a share, from $5.8 million, or 85 cents a share, a year earlier.

"However, the increased in net income during the last three quarters was not sufficient to offset the unusual charges to earnings in the first quarter of the year," said Fred C. Humphreys, chairman and chief executive officer.

In the first quarter of 1985, Moore said its earnings fell 67% from the year-earlier period after it boosted its provision for credit losses by $6 million, partly as a result of "substantial, fraudulent, and unauthorized extensions of credit by one credit officer to parties with no means of repayment."

Besides the "fraudulent and unauthorized" loans, Moore said its Idaho First National Bank subsidiary charged down two commercial business loans "to more properly reflect their value."

In all of 1985, Moore said its profits declined 5.7% to $20.6 million, or $3.01 a share, from $21.8 million, or $3.20 a share, a year earlier. Moore said its allowance for credit losses stood at 1.34% of total loans and leases at Dec. 31, compared with 1.24% at the end of the third quarter and 1.13% at yearend 1984.

"The Idaho economy continues to experience economic problems, which most likely will continue through 1986," Mr. Humphreys said. "We believe this allowance is adequate to cover potential credit problems."

Moore reported total assets of $3.46 billion at Dec. 31.

Good Year for Valley National

In Phoenix, Valley National Corp., parent of Valley National Bank of Arizona, said fourth-quarter profits increased 23.

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