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Banks Exceed Wall St. Estimates

UnionBanCal and City National see increase in deposits. Wachovia and FleetBoston also gain.

October 16, 2003|From Times Staff and Wire Reports

Two California banking companies, UnionBanCal Corp. and City National Corp., reported higher third-quarter earnings Wednesday while a third, Los Angeles-based Cathay Bancorp, reported earnings flat with results a year earlier.

San Francisco-based UnionBanCal, parent of Union Bank of California, reported net income of $155 million, or $1.02 a share, for the quarter ended Sept. 30, handily beating Wall Street's forecast of 94 cents a share. In the year-ago quarter, the bank earned $138.2 million, or 88 cents a share.

UnionBanCal officials said the earnings growth was fueled by continued large inflows of low-cost deposits, which led to higher fee income on deposit accounts. Non-interest income, including fees, was $201.5 million, compared with $169.1 million in the third quarter of 2002. Net interest income was $401.7 million compared with $392.6 million a year ago.

Beverly Hills-based City National reported net income of $52.2 million, or $1.05 a share, for the third quarter, compared with net income of $48.7 million, or 94 cents, in the third quarter of 2002. Wall Street analysts were expecting 94 cents a share.

City National also reported a sharp increase in deposits -- up 23% from a year earlier.

Also, because of improving credit quality, no provisions were made for credit losses in the quarter, compared with loan-loss provisions of $20.5 million in the year-ago period.

Cathay reported net income of $13 million, or 72 cents a share, in the third quarter. The bank reported identical results in the third quarter of 2002. Analysts were expecting 67 cents.

All three released their earnings reports after the stock market had closed for the day.

Also Wednesday, Wachovia Corp. and FleetBoston Financial Corp., two of the largest U.S. banks, reported higher-than-expected third-quarter profit, as fewer customers defaulted on loans and lending fees grew.

The banks joined Bank of America Corp. and other banks this week in reporting double-digit percentage profit growth and higher earnings in their major business lines.

Charlotte, N.C.-based Wachovia said net income rose to $1.1 billion, or 83 cents a share, from $913 million, or 66 cents, a year earlier.

FleetBoston said net income rose to $675 million, or 64 cents a share, from $579 million, or 55 cents, a year earlier.

Both banks released their earnings early Wednesday. Wachovia shares fell 2 cents to $44.29, and FleetBoston's stock fell 11 cents to $32.52, both on the New York Stock Exchange.

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