Magazine article American Banker

B of A Posts Higher Profits, Sets $1.7 Billion Realty Sale

Magazine article American Banker

B of A Posts Higher Profits, Sets $1.7 Billion Realty Sale

Article excerpt

SAN FRANCISCO - BankAmerica Corp. reported fourthquarter earnings of $473 million, 66% more than in the year earlier period.

The company's earnings, which reflect last April's acquisition of Security Pacific Corp., are not directly comparable with those of earlier quarters because of the "ongoing merger-integration process," BankAmerica said.

Stock Price Rises

Separately, it confirmed that it will sell $1.7 billion of real estate assets to a corporation owned by a Morgan Stanley realty fund. BankAmerica did not reveal terms of the deal, but its chief financial officer said the bank is taking mark-to-market writedowns "of more than 50%" in transferring the bad assets.

The bank's fourth-quarter results met analysts' expectations, but the company's stock rose $2 per share in late trading Tuesday, to $35.375. The stock had fallen $1.25 per share on Monday in anticipation of the earnings release.

Analysts said the solid quarterly profit at the nation's second biggest bank combined with the asset-sales agreement to re-assure investors that the megamerger is proceedingaccording to plan.

"The main thing is there are no negative surprises," said Raphael Soifer, analyst with Brown Brothers Harriman & Co.

For the full year, Bank-America netted a record $1.5 billion, despite the cort of absorbing its California rival.

Analysts said credit problems related to the merger appear to be under control. Goodwill and other intangibles reflecting writedowns of Selcurity Pacific assets rose 3. …

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