BankAmerica’s Income Slips 12% in 2nd Quarter

SAN FRANCISCO — BankAmerica Corp., the nation’s third-largest banking firm, posted second-quarter earnings 12% lower than a year ago, but bank executives said they were pleased with results in the company’s core activities.

They said the company benefited from strong growth in domestic loans and core deposits, close expense management and a substantial decline in non-accruing assets.

“The corporation’s results in the second quarter underscore the strength of our primary businesses,” said Chairman and Chief Executive Richard Rosenberg.

BankAmerica, parent company of Bank of America, earned $267 million in the second quarter, down from last year’s $304 million.

Results for 1989 included only $44 million in interest payments from Brazil.

Since unrecoverable Latin American loans hurt it badly in the mid- to late-1980s, the bank has trimmed much of its lending exposure in the hemisphere.

For the first six months, BankAmerica earned $545 million, compared to $579 million a year ago. The 1989 figure included $82 million in Brazilian interest.

The bank set aside $210 million as a provision for loan losses in the quarter, compared to $170 million in the year-ago quarter.

After the provision, its loan-loss reserve stood at $2.87 billion on June 30. That is 3.6% of outstanding loans. The $2.87-billion total includes $1.74 billion in Third World debt.

In the 1989 quarter, the loan-loss reserve stood at $3.48 billion, or 4.93% of outstanding loans.

Non-accruing assets totaled $3.1 billion, against $4.1 billion a year ago. Non-interest-accruing foreign loans were at $2.20 billion, down from $3.2 billion in 1989.

In 1990, domestic real estate loans were $310 million, compared to last year’s $366 million.

In recent years, the bank has reduced its exposure in real estate loans. California real estate has shown signs of a slump recently.

The bank’s assets were at $104 billion on June 30, compared to $98.3 billion a year earlier.

Loans increased to $80.6 billion from $70.6 billion. Deposits were at $85.7 billion, against $78.1 billion a year earlier.