American Security Corp., the holding company for American Security Bank, reported that profits lept more than five-fold in 1985, thanks mostly to a decrease in the level of bad loans.
Sovran Financial Corp. and Suburban Bancorp -- two area bank holding companies that are about to merge -- separately reported improved profits in 1985.
American Security Corp. said net income totaled $25.4 million ($2.17 per share), compared with $4.7 million (41 cents) in 1984. The main reason for the improved performance was "a significant decrease" in both the level of nonperforming assets and the provision for loan losses, as well as an increase in the company's net interest revenue, American Security said.
The turnaround was particularly sharp in the fourth quarter, when earnings totaled $6.4 million (54 cents), compared with a loss of $11.9 million in the same period of 1984, the bank said.
Nonperforming assets at American Security totaled $96.9 million at the end of 1985, compared with $142.4 million at the end of the previous year, the bank said. Provision for loan losses was $20.6 million, compared with $61.7 million for the year before.
The bank's loans totaled $2.22 billion as of Dec. 31, with assets standing at $4.15 billion.
*Sovran Financial Corp. of Norfolk, the parent company of Sovran Bank, the largest in this area, reported that net income grew 14.8 percent, from $80.6 million ($3.14 per share) in 1984 to $92.6 million ($3.50) for the year ending Dec. 31. Net income for the fourth quarter totalled $23.9 million (91 cents), compared with $21.4 million (81 cents) in the same period a year ago.
C. A. Hutchins, Sovran's chairman of the board, attributed the earnings increases to high levels of both net interest income and noninterest income. The level of nonperforming assets leveled off slightly, from $23.4 million at the end of 1984 to $20.3 million.
Sovran, with $9.7 billion in assets, is awaiting regulatory approval for its proposed merger with Suburban Bancorp, a $3.4 billion institution in Bethesda.
*Suburban Bancorp reported that profits grew 17.6 percent in 1985, from $26.9 million ($5.38 per share) in 1984 to $31.6 million ($5.88) for the year ended Dec. 31. The improvement came despite a slight decline in the fourth quarter; Suburban reported that fourth-quarter net income in 1985 totaled $4.9 million (92 cents), compared with $7.7 million ($1.44) for 1984.
The primary reasons for the improved performance over the course of the year were "strong growth in the company's loan portfolio and other earning assets and the maintenance of favorable interest margins," said Robert F. Tardio, Suburban's chairman and chief executive.