NationsBank Corp - 3rd Quarter & 9 Mths Results

RNS No 1747f
NATIONSBANK CORPORATION
14th October 1997
 
NATIONSBANK REPORTED 26 PER CENT INCREASE IN NET INCOME TO $788 MILLION IN
THIRD QUARTER 1997
 
:: This press release is transmitted on behalf of Nationsbank Corporation.
 
Charlotte, North Carolina, October 14 - NationsBank (NYSE: NB)
third-quarter net income increased 26 per cent from the year-ago quarter to
$788 million, or $1.11 per common share, reflecting growth in revenue, cost
containment and the benefit from recent acquisitions.

"Diversified revenue streams and our disciplined attention to expense
control have generated increased earnings for our company,'' said Hugh L.
McColl Jr., chief executive officer.
 
"We look forward to leveraging our business strengths across a customer
base expanded by the addition of Montgomery Securities and the pending merger
with Barnett Banks,'' McColl added.

Net income for the first nine months of 1997 rose 30 per cent to $2.26
billion, or $3.13 per common share. This compared to net income of $1.74
billion, or $2.91 per common share, in the first nine months of 1996.
Excluding a merger-related charge in the first quarter of 1996, operating net
income and earnings per share for the first nine months of 1996 were $1.82
billion and $3.04, respectively.
 
Third quarter 1997 results included the benefit of several acquisitions
completed in 1996 and early 1997, primarily the acquisition of Boatmen's
Bancshares, Inc. on January 7, 1997.
 
Earnings Highlights (third quarter 1997 compared to third quarter 1996
results)
 ::Cash basis earnings (net income excluding amortization of intangibles)
were $1.27 per common share, up 13 per cent from $1.12 per share
 
 ::Return on average tangible common shareholders' equity increased 840
basis points to 32.0 per cent, from 23.6 per cent
 
 ::Noninterest income increased 38 per cent to $1.22 billion driven by
increases in all major categories
 
 ::The cash basis efficiency ratio improved to 52.0 per cent from 54.6 per
cent, reflecting successful integration efforts and expense containment
 
Reported earnings
 
NationsBank earned $788 million in the third quarter of 1997. This
represented a 26-per cent increase over the $625 million earned in the third
quarter 1996. Earnings per common share for the third quarter 1997 rose 5 per
cent to $1.11, from $1.06 in the year-ago quarter. Return on average common
shareholders' equity was 15.9 per cent in the third quarter 1997, down from
19.0 per cent in the year-ago quarter, due primarily to the equity issued in
the Boatmen's Bancshares, Inc. acquisition.
 
Cash basis earnings

Cash basis earnings increased 37 per cent to $899 million in the third
quarter of 1997, or $1.27 per common share. This compared to $658 million, or
$1.12 per common share, in the third quarter 1996. The return on average
tangible common shareholders equity rose to 32.0 per cent in the third quarter
1997, from 23.6 per cent in the year-ago quarter.
 
Net interest income

In the third quarter of 1997, taxable-equivalent net interest income
increased 24 per cent to $2 billion compared to third quarter 1996. The growth
was achieved through a 21-per cent increase in average loans and leases and an
11-basis-point expansion in the net interest yield. The improvement in the net
interest yield to 3.80 per cent from 3.69 per cent was primarily the result of
the improved contribution of the securities portfolios and deposit expense
management efforts.
 
Noninterest income

Noninterest income rose 38 per cent to $1.22 billion in the third quarter
of 1997. This growth was attributable to higher levels of income from
virtually all areas, including deposit accounts, asset management and
fiduciary service fees, trading, investment banking and a gain on the sale of
a credit card portfolio.
 
Efficiency

In the third quarter of 1997, the cash basis efficiency ratio improved
approximately 260 basis points to 52.0 per cent, compared to 54.6 per cent in
the third quarter 1996. Including the amortisation of intangibles, the
efficiency ratio was 55.5 per cent in the third quarter 1997 compared to 55.9
per cent in 1996.
 
Credit quality

Total nonperforming assets were $1.27 billion on September 30, 1997, or
0.91 per cent of net loans, leases and factored receivables and other real
estate owned, compared to 0.93 percent of net levels on September 30, 1996.
The allowance for credit losses totaled $2.78 billion at quarter-end, equaling
252 per cent of nonperforming loans, compared to $2.32 billion, or 236 per
cent, one year earlier. In the third quarter of 1997, provision for credit
losses was $190 million. Net charge-offs for the quarter were $199 million or
0.53 per cent of average net loans, leases and factored receivables, compared
to .44 per cent in the third quarter 1996.
 
Capital Strength

Total shareholders' equity was $20.32 billion on September 30, 1997. This
represented 8.38 per cent of period-end assets, compared to 7.09 per cent at
September 30, 1996. Book value per common share rose 26 per cent to $28.73 at
the end of the third quarter 1997 from third quarter 1996.
 
NationsBank Corporation, headquartered in Charlotte, North Carolina, is a
bank holding company that provides financial products and services nationally
and internationally to individuals, businesses, corporations, institutional
investors and government agencies. NationsBank has primary retail and
commercial banking operations in 16 states and the District of Columbia. As of
September 30, 1997, NationsBank had total assets of $242 billion.
 
NATIONSBANK CORPORATION FINANCIAL HIGHLIGHTS
 
                                     THREE MONTHS          NINE MONTHS
                                 ENDED SEPTEMBER 30    ENDED SEPTEMBER 30
                                    1997      1996       1997  1996(1)
 FINANCIAL SUMMARY
 (In millions except per-share data)
 Net income                         $788      $625     $2,259     $1,743
 Earnings per common share          1.11      1.06       3.13       2.91
 Fully diluted earnings
 per common share                   1.08      1.05       3.04       2.87
 Cash basis earnings (2)             899       658      2,582      1,834
 Cash basis earnings per share      1.27      1.12       3.58       3.06
 Cash basis fully diluted
 earnings per share                 1.23      1.11       3.48       3.02
 Average common shares issued    708.278   585.266    719.489    595.545
Average fully diluted common
 shares issued                   728.373   596.135    741.455    606.154
Price per share of common
 stock at period end            $61.8750  $43.4375   $61.8750   $43.4375
Common dividends paid                232       169        714        518
Common dividends paid per share     0.33      0.29       0.99       0.87
 referred dividends paid 2 3 9 11
 
   EARNINGS SUMMARY
 (Taxable-equivalent in millions)
 
 Net interest income              $2,001    $1,616    $5,996      $4,811
 Provision for credit losses        (190)     (145)     (570)       (455)
 Gains on sales of securities         19        26        91          34
 Noninterest income                1,224       886     3,502       2,688
 Other real estate owned expense      (5)       (6)       (7)        (13)
 Noninterest expense              (1,788)   (1,400)   (5,396)     (4,317)
 
    Income before income taxes     1,261       977     3,616       2,748
 Income taxes - including
  FTE adjustment*                    473       352     1,357       1,005
 Net income                         $788      $625    $2,259      $1,743
 
   *FTE adjustment                   $29       $21       $86         $72
 
 AVERAGE BALANCE SHEET SUMMARY
 (In billions)
 
 Loans and leases, net          $146.536  $121.197  $147.109   $122.729
 Managed loans and leases, net   151.929   126.666   152.521    126.662
 Securities held for investment    1.424     3.173     1.662      3.730
 Securities available for sale    24.625    16.388    22.086     19.227
 Total securities                 26.049    19.561    23.748     22.957
 Earning assets                  209.678   174.299   208.846    179.465
 Total assets                    241.867   197.923   241.526    203.093
 Noninterest-bearing deposits     31.901    24.190    31.185     24.000
 Interest-bearing deposits       100.750    83.525   102.902     84.200
 Total deposits                  132.651   107.715   134.087    108.200
 Shareholders' equity             19.678    13.133    20.126     13.276
 Common shareholders' equity      19.619    13.014    20.013     13.163
 
    OTHER FINANCIAL DATA
 
 Net interest yield                3.80%     3.69%     3.84%      3.58%
 Return on average assets          1.29      1.26      1.25       1.15
 Return on average
 tangible assets                   1.53      1.34      1.48       1.22
 Return on average common
 shareholders' equity             15.91     19.00     15.03      17.58
 Return on average tangible
 common shareholders' equity      31.96     23.56     29.55      21.56
 Total equity to assets ratio
  (period-end)                     8.38      7.09      8.38       7.09
 Gross charge-offs (in millions    $283      $194      $793       $628
 Net charge-offs (in millions)      199       135       567        447
  % of average loans, leases and
  factored accounts receivable, net  .53%     .44%     .51%       .48%
 Managed credit card net charge-offs
  as a % of average managed credit
  card receivables                  6.74%     4.67%    6.36%     4.29%
 Efficiency ratio                   55.47     55.92    56.82    55.97
 Cash basis efficiency ratio        52.04     54.63    53.42    54.75
 
     (1) 1996 results included a merger-related charge of $118
     million($77 million, net of tax, or $.13 per common share).
 (2) Cash basis earnings equal net income excluding amortization
     of intangibles.
                                                   SEPTEMBER 30
                                                 1997       1996
 BALANCE SHEET SUMMARY
 (In billions)
 
 Loans and leases, net                        $138.352   $120.829
 Securities held for investment                  1.301      3.035
 Securities available for sale                  34.239     13.334
 Total securities                               35.540     16.369
 Earning assets                                212.176    167.284
 Factored accounts receivable                    1.230      1.249
 Mortgage servicing rights                       1.186       .944
 Goodwill, core deposit and
  other intangibles                              8.404      2.002
 Total assets                                  242.437    187.671
 
 Noninterest-bearing deposits                   33.010     25.990
 Interest-bearing deposits                      97.437     82.142
 Total deposits                                130.447    108.132
 Shareholders' equity                           20.317     13.304
 Common shareholders' equity                    20.262     13.186
  Per common share (not in billions)             28.73      22.88
 
 Risk-based capital
  Tier 1 capital                                $13.451   $11.128
  Tier 1 capital ratio                            7.00%     7.05%
  Total capital                                 $22.221   $19.031
  Total capital ratio                            11.56%    12.05%
 
 Leverage ratio                                   6.16%     6.30%
 
 Common shares issued (in millions)             705.348   576.224
 
 Allowance for credit losses                     $2.783    $2.319
 Allowance for credit losses
  as % of net loans, leases
  and factored accounts rec eivable                1.99%    1.90%
 Allowance for credit losses
  as % of nonperforming loans                     251.74   235.64
 Nonperforming loans                              $1.106    $.984
 Nonperforming assets                              1.266    1.135
 Nonperforming assets as % of:
  Total assets                                     0.52%    0.61%
  Net loans, leases, factored accounts
   receivable and other real estate owned          0.91%    0.93%
 
 OTHER DATA
 
 Full-time equivalent headcount                  78,097    63,142
 Banking centers                                  2,583     1,980
 ATMs                                             6,052     3,609
 
 BUSINESS UNIT RESULTS - Three months ended September 30, 1997
 (in millions)
 
                        General Bank    Global Finance   Financial Services
 Total revenue           $2,389  75%      $628  20%       $174 5%
 Net income               530    67%       196  24%         35 4%
 Return on average
  tangible equity         32%              18%                14%
 Average loans and
  leases, net           $94,882  65%   $43,527  30%     $8,698 5%
 
Contact: Media - Susan Carr, 001-704-386-8059, or Analysts - Kevin Stitt
tel [phone], both of NationsBank Corporation
 
 
END
 
 


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