First Security Corp. had an 8.4 percent increase in earnings for the first half of 1988 as returns on assets continued to improve, the regional banking firm said.
Earnings improved to $15 million as of the end of June 1988, compared to $13.9 million earned during the same six-month period in 1987. Fully diluted earnings per share were $1.18, an improvement over last year's $1.09 per share earned during the first half.Second quarter earnings were up to $7 million, a 5.1 percent increase over 1987's $6.7 million earned during the second period. On a per share basis, fully diluted earnings were 55 cents for the quarter, a 3 cent increase over last year.
First Security Chairman and Chief Executive Spencer F. Eccles said the improved earnings resulted primarily from continued margin improvement as the corporation increased its loan-to-deposit ratio and continued to reduce non-performing assets.
Average return on earning assets was 10.05 percent, compared to the 9.19 percent posted in the first half of 1987. Average net interest margin grew to 4.41 percent for the first six months of 1988 from 3.68 percent in last year's first half.
For the second quarter, First Security's average return rose from 9.29 percent in 1987 to 10.04 percent this year. Average net interest margin was 4.36 percent in 1988 compared to 3.72 percent the year before.
Total loans and leases held by First Security subsidiaries rose to $3.7 billion, an 8 percent increase over the amount held on June 30, 1987, while total assets dropped slightly from $5.05 billion to $5.02 billion at quarter's end.
"This modest decrease reflects our planned and ongoing balance sheet adjustments which have improved margins and increased our loan-to-deposit ratio," Eccles said.
He said loan production increased during the second quarter; subsidiaries made 30,082 loans amounting to $1.1 billion, compared to 26,052 for $782 million for the same quarter in 1987. Second quarter loans included 2,816 commercial for $653 million, 25,861 consumer installment for $267 million and 1,405 real estate loans for $170 million.
Non-performing assets were trimmed for the seventh consecutive quarter, and at the end of the second quarter were $103.5 million, or 2.78 percent of total loans and leases, their lowest level in more than five years, Eccles said.
"During (the seven quarters) we have lowered these burdensome assets by more than half from their November 1986 high of $229 million," he said.
Deposits during the first half grew to $3.82 billion, compared to $3.77 billion at the end of last year's first half.
Primary capital stood at $450 million, or 8.83 percent of total assets.
Stockholders' equity climbed to $374 million - 7.45 percent of total assets - up from $360 million on June 30, 1987, while First Security's common stock book value at the end of the second quarter rose to $30.52 from $29.37 last year.
Reserves for losses on loans and other real estate owned (OREO) were $75.5 million, equaling 1.72 percent of total loans and leases, 99.5 percent of non-performing assets, and the reserve for OREO is 23 percent of the total.
First Security operates 163 banking offices in Utah, Idaho and Wyoming, and operates a leasing company, investment management firm, two insurance companies, a discount brokerage and a federally insured thrift and loan.