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CONTINENTAL BANK CORPORATION REPORTS THIRD-QUARTER NET INCOME OF $53 MILLION

 CONTINENTAL BANK CORPORATION REPORTS
 THIRD-QUARTER NET INCOME OF $53 MILLION
 CHICAGO, Oct. 15 /PRNewswire/ -- Continental Bank Corporation (NYSE: CBK) today reported third-quarter net income of $53 million, compared with a $185 million loss for the same period last year. On a per share basis, earnings were $0.82 for the quarter, compared with a loss of $3.61 a year ago. In 1991, results in the third quarter included a $204 million provision for credit losses and a $27 million charge related to corporate restructurings. Current year-to-date earnings per share was $2.50.
 Third-quarter 1992 results, compared with the 1991 period, reflected increased revenues from structured finance activities, including loan syndications and sales, improved trading profits and higher equity investment revenues. Net interest revenue was down slightly from the same quarter last year because of lower asset levels. Excluding the third-quarter 1991 restructuring charge, operating expenses for the 1992 quarter fell 9 percent.
 "During the past four quarters, earnings have ranged from $50 million to $57 million, and returns on common equity from 14 percent to 17 percent, a solid record of profitability in a modest economic environment," said Chairman Thomas C. Theobald. "In many markets, we have gained more customers this year than in all of 1991, so we are optimistic about the growing value of Continental's franchise."
 All Banking Product Revenue Categories Increase
 Total banking product revenues increased 11 percent from the third quarter of last year. Banking product revenues include management's internal allocations of funding costs.
 Banking Product Revenues
 Third Quarter Year-to-Date
 ($ in millions) 1992 1991(A) 1992
 1991(A)
 Corporate Finance $122 $107 $360 $348
 Specialized Financial Services 69 64 205 199
 Trading 21 19 42 81
 Equity Investments 26 24 100 88
 Total Banking Product Revenues 238 214 707 716
 All Other (7) (5) (20) (10)
 Total Revenues $231 $209 $687 $706
 (A) Restated to conform to the current period's presentation.
 Corporate finance, which includes revenues from lending, syndication and distribution, increased 14 percent from the third quarter of 1991. Syndication and distribution revenues increased $12 million through gains on the sale of loans, primarily Latin American. Although the net interest margin increased, lending revenues were lower, due to a decline in earning assets.
 Revenues from specialized financial services increased 8 percent from the year-ago quarter, due to higher fees from cash and securities management services. In 1991 and 1992, these revenues have averaged nearly $68 million per quarter and have accounted for 28 percent of total banking product revenues. Specialized financial services revenues include fees for cash and securities management, private banking and fiduciary services.
 Revenues from trading activities rose $2 million from the same quarter last year, due to improved foreign-exchange results offset by lower revenues from securities and interest-rate derivative products.
 Revenues from equity investments increased slightly from the 1991 third quarter. Before management's allocation of funding costs, the 1992 third quarter included $8 million of gains from the sale of Latin American investments, compared with $1 million in last year's quarter. On the same basis, domestic equity revenues, primarily gains on sale, totaled $24 million in the 1992 third quarter, compared with $27 million in the same quarter last year.
 Translation losses in all other revenues in both quarters were attributable to Latin American operations.
 Operating Expenses Decline
 Third Quarter Year-to-Date
 ($ in millions) 1992 1991 1992 1991
 Employee $ 74 $ 88 $219 $264
 Occupancy & Equipment 18 24 49 72
 Other Operating 55 76 162 177
 Total Operating Expenses $147 $188 $430 $513
 Operating Staff Level 4,266 5,129
 Excluding provisions for business restructuring, operating expenses in 1992 were down $14 million from last year's quarter and $47 million, or 10 percent, on a year-to-date basis. This drop reflects benefits from the 1991 restructuring and other ongoing cost-control measures. Continental continued to reduce staff levels in the third quarter with a 17 percent decline from a year ago (including the outsourcing of information technology services at year-end 1991).
 As anticipated, third-quarter 1992 operating expenses rose over the second quarter, due, in part, to a favorable litigation settlement netted against second-quarter costs.
 Provision for Credit Losses Decreases
 The quarterly and year-to-date provisions for credit losses declined from the same periods last year.
 Third Quarter Year-to-Date
 ($ in millions) 1992 1991 1992 1991
 Provision for Credit Losses $ 25 $204 $ 80 $310
 Charge-offs $ 90 $ 65 $159 $156
 Recoveries (30) (9) (49) (31)
 Net Charge-offs $ 60 $ 56 $110 $125
 During the third quarter, bank regulatory agencies directed financial institutions to lower the carrying value of Brazilian term outstandings to 40 percent. Continental's charge-offs resulting from this directive and Brazilian loan sales totaled $24 million for the third quarter of 1992. These actions reduced Brazilian term outstandings to approximately $86 million and the allocated transfer risk reserve to $21 million on Sept. 30, 1992. Both LDC charge-offs and recoveries were less than $1 million for the 1991 third quarter.
 The reserve for credit losses was $380 million, or 2.9 percent of total loans, on Sept. 30, compared with $415 million, or 3.2 percent, on June 30 and $476 million, or 3.4 percent, a year ago. The reserve for credit losses as a percent of nonperforming loans was 57.8 percent on Sept. 30, down slightly from 57.9 percent on June 30, but up from 52.6 percent a year ago.
 Nonperforming Assets
 Nonperforming assets increased 1 percent from June 30, but decreased 15 percent from Sept. 30 of last year. During the quarter, increases in nonperforming real estate loans, primarily to residential developers in California, and other real estate owned (OREO) more than offset $122 million of decreases in HLT, LDC and other corporate nonperforming loans. The $57 million increase in OREO from last quarter was due to the addition of two residential development projects, both in-substance foreclosures. The decline in nonperforming loans, excluding real estate, resulted from charge-offs, sales and cash payments.
 "By the bank's own broader measures of credit quality, we have seen a significant improvement in the quality of the loan portfolio," said Theobald.
 Real estate nonperforming assets (nonperforming loans plus OREO) totaled $388 million at quarter-end. Of this amount, troubled office buildings and other nonresidential real estate properties comprised $103 million, or less than 8 percent of the commercial real estate portfolio.
 Nonperforming Assets
 Sept. 30 June 30 Sept. 30
 ($ in millions) 1992 1992 1991
 Corporate $199 $220 $200
 Real Estate 246 184 281
 HLT 108 162 240
 Total Non-LDC Nonperforming Loans 553 566 721
 LDC 104 151 184
 Total Nonperforming Loans 657 717 905
 OREO(A) 142 85 59
 Other Nonperforming Assets(A) 28 16 9
 Total Nonperforming Assets $827 $818 $973
 Nonperforming Loans to Total Loans 4.97pct. 5.45pct. 6.45pct.
 (A) Includes credits designated as being in-substance foreclosed for accounting purposes.
 Continental estimates that $140 million, or 25 percent, of its non- LDC nonperforming loans were contractually current as to principal and interest payments on Sept. 30, 1992.
 The combined cost of credit provisions and forgone revenue on nonperforming loans was about $39 million in the third quarter of 1992, compared with $228 million in last year's third quarter.
 Balance Sheet
 Total assets of $23.0 billion on Sept. 30 were down $700 million from June 30, 1992, and $900 million from Sept. 30, 1991. Loans held on the balance sheet decreased $800 million from last year's level.
 Continental's equity-to-assets ratio rose to 7.1 percent on Sept. 30, from 6.7 percent on June 30, and 6.2 percent a year earlier. Book value per common share on Sept. 30 was $23.14, compared with $22.39 at June 30 and $20.16 a year ago.
 Capital Ratios
 On Sept. 30, Continental's estimated ratio of Tier 1 capital to risk-adjusted assets was 6.7 percent, and total capital to risk-adjusted assets was 9.5 percent, up from 5.6 percent and 8.5 percent, respectively, a year ago. The leverage ratio (Tier 1 capital to average assets) was 7.4 percent on Sept. 30, compared with 6.1 percent on Sept. 30, 1991.
 -0- 10/15/92
 /NOTE TO EDITORS: Continental Bank Corporation is a bank holding company that focuses on meeting the capital and financial management needs of public and privately held businesses nationwide. Through its subsidiaries, the company provides business financing, specialized financial and operating services and private banking services. Continental also engages in equity finance and investing, as both principal and arranger, and international trading, for customers and its own account./
 /CONTACT: Jane Crowley Griffin, 312-923-5122, or Edgar P. McDougal, 312-923-5200, or William C. Murschel, 312-923-5130, all of Continental Bank/
 (CBK) CO: Continental Bank Corporation ST: Illinois IN: FIN SU: ERN


PS -- NY028 -- 0287 10/15/92 09:55 EDT
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