First Maryland Bancorp (FMB), AIB's US subsidiary, recorded a fall in net income from $95.7 million (€90.2 million) to $42.4 million (€39.95 million) in the first quarter to March 31st, 1999. However, the first quarter of 1998 was boosted by a profit of $37.4 million on the sale of credit card receivables and a $19 million gain from the sale of securities. Excluding these, and the provision for credit losses, indicates a marginal underlying growth. The challenge, and goal, for the bank, is to increase revenue as it continues to gain cost-saving benefits from the integration of Dauphin Deposit Bank, said Mr Maurice Crowley, head of capital and group investor relations. Maryland, he added, expects to grow its business this year, but he stressed it was a "tough market".
This competition is reflected in the bank's latest results. Total interest and dividend income fell from $270.2 million to $264.2 million. Net interest income dropped from $136.5 million to $131.6 million and non-interest income slumped from $179.5 million to $83.9 million. The group had to contend with foreign maritime loan charge-offs totalling $7 million and associated collection costs of £3.2 million in the first three months.
However, on the plus side, non-interest expenses were cut from $155.5 million to $136.7 million due to cost savings associated with the integration of Dauphin and the absence of expenses from business lines exited last year. Mr Frank Bramble, FMB's chief executive officer, said the bank was pleased with the growth in its core business and the completion of the integration of Dauphin with FMB. "We are particularly pleased that, in addition to realising cost savings associated with the Dauphin integration, we gained market share and grew our business in Pennsylvania. While we're experiencing the same net interest margin pressure as the rest of the industry, excluding the challenges associated with the maritime portfolio, we have exceeded our first-quarter objectives".
Non-performing assets amounted to $121.7 million as at March 31st, 1999. These represented 0.68 per cent of total assets. Non-performing loans were $64.4 million. FMB said these were covered 244 per cent by the allowance for credit losses.
The bank's resources fell from $18.3 billion to $17.9 billion. With headquarters in Baltimore, it operates almost 300 branches and more than 500 ATMs. Its name is to be changed to Allfirst Financial Inc. This, said Mr Tom Mulcahy, group chief executive, AIB, represents the "final step in the integration of our US businesses".
