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Security Pacific Earnings Rebound in Third Quarter

October 20, 1987|DOUGLAS FRANTZ | Times Staff Writer

Security Pacific Corp. posted net income of $128.1 million for the third quarter, the big Los Angeles-based banking company said Monday, an increase of 8.3% over the same period a year ago.

The quarterly earnings report marked a rebound from Security Pacific's net loss of $172.4 million in the second quarter, which resulted from a $500-million addition to reserves for loan losses.

Security Pacific, the nation's seventh-largest bank and the state's second largest, was the first big California bank to issue its earnings report for the third quarter, which ended Sept. 30.

"There really were no surprises," said Dan B. Williams, banking analyst at the San Francisco brokerage of Sutro & Co.

BankAmerica is expected to release its third-quarter earnings Thursday. Analysts anticipate that the state's biggest banking company will show a moderate profit for the period after suffering enormous losses in the first half of the year.

Security Pacific said its earnings were held down by $10.1 million in costs associated with the purchase of Seattle-based Rainier Bancorp in a stock transaction that closed Aug. 31. The suspension of interest payments on loans to Brazil and Ecuador reduced net income by $8.1 million, Security Pacific said.

For the first nine months of 1987, Security Pacific's earnings were $53.2 million, down from $335.1 million in the same period last year.

Without the $500-million loan-loss reserve by Security and a $58-million provision by Rainier, earnings for the first nine months would have been $359.5 million.

Separately, J. P. Morgan & Co., parent of Morgan Guaranty Trust Co. of New York, reported third-quarter net income of $219.2 million, up 3.6% from the same period of 1986. For the nine months ended Sept. 30, the company reported a net loss of $140.8 million, related primarily to the $875-million allowance for credit losses on foreign debt in the second quarter.

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