Magazine article American Banker

Three NY Banks Post Big Gains in 2d Quarter: Chemical's Net Income Up 39%; Irving's, Bank of NY's Up 19%

Magazine article American Banker

Three NY Banks Post Big Gains in 2d Quarter: Chemical's Net Income Up 39%; Irving's, Bank of NY's Up 19%

Article excerpt

Three NY Banks Post Big Gains In 2d Quarter

Chemical's Net Income Up 39%; Irving's, Bank of NY's Up 19%

Three major bank holding companies here all reported gains in second-quarter net income Thursday, led by a 39.7% increase at Chemical New York Corp.

Irving Bank Corp. and the Bank of New York Co. both posted 19% improvements over their second-quarter 1984 results.

James J. McDermott, a vice president with Keefe, Bruyette & Woods Inc., said the three banks' solid second-quarter results are "representative of what we expect to see from other major New York banks.'

He expects second-quarter earnings from the major money center institutions here to be marked by wider net interest margins, high loan-loss provisions, and impressive noninterest income results.

In a statement, Chemical credited its strong performance to "higher net interest income, substantial gains on the sales of investment securities, higher profits from trading account and foreign exchange activities, and stronger service fees.'

However, these improvements were partially offset by increased noninterest expense and higher provisions for loan losses.

Chemical, for example, set aside a much higher loan-loss provision in the second quarter of 1985, relative to its net chargeoffs, than in the first quarter of this year.

The company set aside $65.5 million against loan losses, which amounted to 152% of its $43 million in net chargeoffs. In the first quarter of this year, the company set aside a $33.6 million loan-loss provision, which amounted to 112% of its $30 million in chargeoffs.

Mr. McDermott said the high provisions, especially in relation to chargeoffs, "reflect the opportunities given to major bank holding companies by good earnings to build their loan-loss reserves.'

Chemical also reported that it received $6. …

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