First Security Corp. reported Tuesday record third-quarter net income of $36.78 million, up 12.9 percent over the $4.20 million reported in the same period last year.
Income per share was 73 cents, up 7.4 percent from the 68 cents reported for the third quarter of 1993.For the first nine months, income totaled $105.17 million, up 13.1 percent or $12.17 million over the same period last year.
A First Security spokesman said the third-quarter earnings generated a 1.26 percent return on average assets, down from 1.39 percent for the period last year, and a 16.74 percent return on average equity, up from 16.19 percent for the quarter last year.
The spokesman said First Security's financial statements for prior years have been restated to reflect the Nov. 19, 1993, merger with First National Financial Corp. and its subsidiary, First National Bank in Albuquerque. That bank has been renamed First Security Bank of New Mexico.
Spencer F. Eccles, chairman and chief executive officer of Salt Lake City-based First Security Corp., noted that third-quarter '94 earnings broke records set in the first and second quarters and continued to build on 1993, the most profitable year in the financial services company's 66-year history.
Eccles cited the 24.4 percent growth in average earnings assets, along with higher noninterest income, as the primary factors in the third-quarter earnings growth.
Despite the record earnings, Eccles said he is concerned about the recent performance of the mortgage banking industry in general and First Security's subsidiary, CrossLand Mortgage, in particular. He said mortgage originations for the newly acquired CrossLand are down over 34 percent from record originations of a year ago. This means, he said, "It is very unlikely that CrossLand will be neutral to earnings per share in 1994."
Eccles blamed recent increases in interest rates for "choking off" loan-mortgage activity faster than economic forecasts predicted.
"And current irrational pricing coupled with severe overcapacity in this market make it very difficult to originate loans profitably, but First Security remains committed to making CrossLand profitable over the long term," he said.
Eccles said he is still "comfortable" with analyst estimates that First Security will earn $2.80 to $2.90 per share for all of 1994.