Los Angeles' First Interstate Bancorp said Wednesday that its 1986 fourth-quarter profit was essentially unchanged from the same period a year earlier. But net income for the full year rose 7.9% to a record $337.9 million.
Chairman Joseph J. Pinola said the flat fourth-quarter results were the result of $12.6 million in one-time charges related to the 1986 tax reform law. Quarterly earnings of $84.8 million were up only $44,000 from the fourth quarter of 1985.
Pinola said profit growth was slowed by continuing high set-asides for future loan losses and a high level of bad loans. The bank's provision for loan losses in the fourth quarter was $125 million, bringing the year-end reserve against possible loan losses to $535.8 million. On Dec. 31, 1985, the loan-loss reserve was $452.5 million.
The bank wrote off $402.4 million in bad loans in 1986, an increase of 28% over 1985. The bank's portfolio of non-performing real estate loans grew by $124 million in 1986, while its total of non-performing foreign loans fell $65 million to $135 million.
First Interstate, the nation's eighth-largest banking company, is the parent of 22 banks in 12 Western states. At First Interstate Bank of California, the company's largest subsidiary, profit grew 26.2% for the year to a record $174 million.
Total assets for the parent company at year-end were $55.4 billion.