Profits soar for big banks in Nevada

Tuesday, Jan. 18, 2000 | 10:46 a.m.

SUN STAFF AND WIRE REPORTS

BancWest buys

BancWest Corp. said today it's buying 68 First Security and Zions Bancorporation branches in Utah and Idaho that First Security and Zions must sell because of their merger.

The sales are required because of antitrust law.

BancWest is the parent company of Bank of the West and First Hawaiian Bank. Bank of the West already has 162 branches in California, Oregon, Washington, Idaho and Nevada.

The First Security-Zions merger also will result in the closure of 39 branch offices, including 12 in Nevada. In Nevada, Zions operates as Nevada State Bank, which just acquired Pioneer Citizens Bank. All branches remaining open will take the First Security name.

The biggest banks in Nevada -- Bank of America and Wells Fargo -- reported higher quarterly earnings today. Also posting improved results were the parent companies of Citibank and California Federal Bank.

Cost cutting, strong growth in investment banking, trading, mortgages and credit cards pushed Bank of America's fourth-quarter operating earnings up 32 percent to $2.12 billion.

Operating earnings per share rose 35 percent to $1.23, up from 91 cents in the last quarter of 1998, when operating earnings totaled $1.6 billion.

B of A's results met the average estimate of analysts surveyed by First Call/Thomson Financial.

The Charlotte, N.C.-based bank recorded a $213 million after-tax charge to cover costs associated with the merger of NationsBank and BankAmerica in the latest quarter, compared with a $441 million after-tax charge a year earlier.

As a result, fourth-quarter net income was $1.90 billion, or $1.10 a share, compared to $1.16 billion, or 66 cents a share a year earlier.

"(The year) 1999 was a significant step in the right direction," Hugh L. McColl Jr., Bank of America chairman and chief executive officer, said in a statement. "We delivered above-average earnings growth and either met or made progress toward our other financial targets.

"Our merger transition effort could not have gone more smoothly," he said. "We ended the year having consolidated all of our business lines, expanded our investment banking platform, and made substantial progress in our relationship-based strategies."

McColl said the company's next goal is to become "the most widely recognized and respected financial services brand" in the industry.

Wells Fargo

Wells Fargo & Co. of San Francisco, the nation's seventh-largest bank, said fourth-quarter profit rose 26 percent on higher fee-based income, lower costs and gains from venture capital investments.

Net income rose to $970 million, or 58 cents a share, from a profit before charges of $768 million or 46 cents in the fourth quarter of 1998. Analysts had forecast an average of 59 cents a share in a First Call/Thomson Financial Survey.

"We're pleased to report that the first full year of the merger of equals of Norwest and Wells Fargo has been a great success," Chief Executive Dick Kovacevich said in a statement.

Citibank

New York-based Citigroup Inc. saw profits soar 86 percent in the fourth quarter, topping Wall Street's most optimistic estimates. Strong fees from its investment banking and Citibank helped boost the bottom-line results at the nation's largest bank.

Citigroup's profits from operations totaled $2.61 billion, or 75 cents a share, beating the analysts' average estimate of 70 cents a share, as well as the highest estimate of 73 cents, according to First Call/Thomson Financial.

California Federal

Golden State Bancorp Inc. of San Francisco, parent of California Federal Bank, reported a fourth quarter profit of $87 million or 63 cents per share, an improvement from the year-ago quarter when the bank lost $55.2 million or 40 cents per share.