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DOMINION BANKSHARES CORPORATION REPORTS RECORD SECOND QUARTER NET INCOME OF $3.2 MILLION

 DOMINION BANKSHARES CORPORATION REPORTS RECORD
 SECOND QUARTER NET INCOME OF $3.2 MILLION
 ROANOKE, Va., July 28 /PRNewswire/ -- Dominion Bankshares Corporation (NASDAQ-NMS: DMBK) has reported net income for the second quarter of 1992 of $3.2 million. A significant factor in this result was the recognition of $15.5 million of unrealized gains on securities held for sale. The unrealized gains recognized in the second quarter do not represent actual securities sales but are a result of recent regulatory requirements to reclassify a major portion of Dominion's investment securities to "held for sale" as of December 31, 1991 and to account for these securities at the lower of cost or market. Excluding the unrealized gains Dominion would have reported a net loss for the second quarter of $10.3 million, primarily the result of a $48.7 million credit loss provision. The reclassification had no impact on reported results for 1991 or for the first six months of 1992, but does increase the previously reported loss for the first quarter of 1992 from $27.8 million to $41.3 million.
 Nonaccruing loans declined from $280 million at March 31 to $235 million at June 30, 1992, or 16 percent, while foreclosed real estate increased from $80 million to $105 million. On June 30, 1992, nonaccruing loans plus foreclosed properties were $340 million, down $20 million from the prior quarter end. The allowance for credit losses totaled $230 million at June 30, 1992 and equaled 98 percent of nonaccruing loans, compared to 82 percent at March 31, 1992. Net charge-offs for the second quarter of 1992 were $47.9 million or 3.22 percent of average loans, net of unearned income. Loans 90 or more days past due and still accruing improved markedly, falling from $32 million at the end of the first quarter to slightly less than $20 million by the end of the second quarter of 1992. One year ago that category was $77 million.
 Warner Dalhouse, Chairman and Chief Executive Officer, said, "We are very pleased with these delinquency ratio improvements. I'm not suggesting we have established a trend, but these delinquency numbers are the most favorable we have reported during this economic cycle. I'm very gratified that the exceptional efforts made by all of our people focusing on these problems are beginning to show noticeable improvements. We have a way to go yet, but things are beginning to look a little better."
 Dominion has seen the level of nonaccruing loans plus foreclosed properties decline for the last three quarters as a result of principal payments, loans returned to accrual status and charge-offs. In addition, costs associated with foreclosed properties continue at high levels and, combined with depressed real estate markets, make the disposition of nonperforming assets a slow, difficult process.
 Dalhouse noted that articles recently published in The Wall Street Journal and The American Banker indicate the strong regulatory trend in favor of market value accounting treatment which has resulted in other banks also reclassifying their investment portfolios. He said, "It appears that the SEC is making progress in its efforts to force banks to mark their securities portfolio to market. We don't agree with their philosophy, but we acknowledge the reality of market value accounting."
 Dominion reported net income of $3.2 million, or 8 cents per share, for the second quarter of 1992, compared to net income of $5.7 million, or 14 cents per share, in the same quarter of 1991. For the first six months of 1992, the Corporation has recorded a net loss of $38.2 million, compared to net income of $11.3 million for the first half of 1991.
 For the second quarter of 1992, net interest income totaled $86.3 million (on a fully taxable equivalent basis) producing a net interest margin for the quarter of 4.02 percent. Excluding the impact of the previously mentioned reclassification of securities held for sale, noninterest income in the second quarter of 1992, totaled $50.5 million compared to $43.7 million and $35.1 million for the first quarter of 1992 and second quarter of 1991, respectively. The increase was principally the result of gains on the sale of assets.
 Noninterest expense for the second quarter of 1992 totaled $97.8 million, compared to $107.9 million for the first quarter of 1992 and $84 million for the second quarter of 1991. The large cost of dealing with foreclosed properties continues to significantly affect the level of noninterest expense.
 Continuing sluggish economic conditions were reflected in the Corporation's financial position as total assets at June 30, 1992, fell to $8.9 billion, down 10.2 percent from the $9.9 billion one year earlier. Loans, net of unearned income, were $5.7 billion at the close of the second quarter of 1992, a 15.4 percent decline from June 30, 1991. Total deposits amounted to $7.6 billion on June 30, 1992, reflecting a 3.3 percent decrease from the $7.8 billion on the same date in 1991. Core deposits of $7.2 billion at mid-year 1992 were virtually unchanged from the level one year earlier.
 At June 30, 1992, stockholders' equity totaled $528 million compared to $565 million on the same date of 1991. Dominion's capital ratios reflected improvement as the lower asset level more than offset the decline in equity. The Corporation's Tier I capital was 7.08 percent, total risk-based capital was 9.87 percent and the company's leverage ratio was 5.16 percent at June 30. The equity to asset ratio was 5.93 percent.
 Dalhouse concluded, "Until business activity improves more than it has, the period ahead will continue to be challenging. We remain cautious due to economic uncertainties and the continued depression of real estate values."
 Dominion Bankshares is a multi-state bank holding company with 332 offices located throughout Virginia and in Tennessee, Maryland and Washington, D.C.
 DOMINION BANKSHARES CORPORATION AND SUBSIDIARIES
 FINANCIAL HIGHLIGHTS
 (In Thousands of Dollars, Except Per Share Data)
 Six Months 2nd Qtr. 1st Qtr.
 6/30/92 6/30/91 1992 1992(B)
 Earnings
 Net interest
 margin (Pct.) 3.97 3.84 4.02 3.91
 Net interest
 income (FTE) $170,716 $177,359 $ 86,341 $84,375
 Net interest
 income 166,101 170,049 84,409 81,692
 Provision for
 credit losses 99,047 60,620 48,740 50,307
 Noninterest income
 before unrealized
 gains (losses)
 on securities
 held for sale 94,207 66,052 50,488 43,719
 Unrealized gains
 (losses) on
 securities held
 for sale (30) -- 15,510 (15,540)
 Noninterest
 income 94,177 66,052 65,998 28,179
 Noninterest
 expense 205,699 166,053 97,779 107,920
 Net income
 (loss) (38,155) 11,251 3,166 (41,321)
 Per Share (1.00) .28 .08 (1.08)
 Dividends per
 share .11 .22 -- .11
 Average Balances
 Assets $9,392,956 $10,010,531 $9,360,089 $9,425,823
 Earning assets 8,614,440 9,246,668 8,604,760 8,624,120
 Loans, net of
 unearned
 income 6,070,731 6,850,356 5,943,925 6,197,536
 Deposits 7,708,383 7,909,186 7,685,148 7,731,617
 Stockholders'
 equity 546,375 560,495 525,213 567,537
 Period-end Balances
 Assets $8,911,041 $ 9,926,466 $8,911,041 $9,402,485
 Earning assets 7,955,575 9,160,643 7,955,575 8,656,589
 Loans, net of
 unearned
 income 5,669,912 6,704,091 5,669,912 6,081,980
 Deposits 7,566,596 7,822,420 7,566,596 7,810,088
 Stockholders'
 equity 528,360 564,992 528,360 522,258
 Capital
 Average primary
 shares (year-to-
 date) 38,635,028 38,264,088 38,635,028 38,601,585
 Tier I capital
 ratio (Pct.) 7.08 6.43 7.08 6.46
 Total risk-
 based capital
 ratio 9.87 9.09 9.87 9.23
 Leverage ratio 5.16 5.14 5.16 5.04
 Equity to assets 5.93 5.69 5.93 5.55
 Book value per
 share $ 13.31 $ 14.37 $ 13.31 $ 13.17
 Credit Quality
 Allowance for
 credit losses $230,000 $224,475 $230,000 $229,120
 As a percent of
 period-end
 losses 4.06 3.35 4.06 3.77
 As a percent of
 nonaccruing
 loans 98 88 98 82
 As a percent of
 nonaccruing loans
 plus foreclosed
 properties 68 62 68 64
 Net charge-offs
 (year-to-date) $68,701 $ 69,636 $ 68,701 $ 20,841
 As a percent of
 average loans 2.26 2.03 2.26 1.35
 90 days past due
 and still
 accruing $19,739 $ 77,348 $ 19,739 $ 32,174
 As a percent
 of period-end
 loans .35 1.15 .35 .53
 Nonaccruing
 loans $ 235,094 $ 255,773 $ 235,094 $ 280,258
 Foreclosed
 properties (lower
 of cost or fair
 value) 105,195 106,240 105,195 80,145
 Nonaccruing loans
 plus foreclosed
 properties $340,289 $ 362,013 $ 340,289 $ 360,403
 As a percent of
 loans plus
 foreclosed
 properties 5.89 5.32 5.89 5.85
 Restructured
 loans $ 6,791 $ 10,083 $ 6,791 $ 9,774
 Selected Ratios
 (A) (Percent)
 Return on average
 assets (.81) .22 .14 (1.75)
 Return on average
 common equity (14.56) 3.87 2.21 (30.06)
 Return on average
 total equity (13.97) 4.01 2.41 (29.12)
 Dividends
 declared to net
 income:
 On common stock N/M 75 N/M N/M
 On common and
 preferred
 stock N/M 81 10 N/M
 Internal capital
 generation rate N/M .8 2.2 N/M
 Net overhead
 ratio 2.37 2.00 1.36 3.38
 4th Qtr. 3rd Qtr. 2nd Qtr
 1991 1991 1991
 Earnings
 Net interest margin (Pct.) 3.64 3.78 3.89
 Net interest income (FTE) $ 80,175 $ 87,298 $ 88,358
 Net interest income 77,234 84,014 84,912
 Provision for credit losses 32,000 50,004 30,009
 Noninterest income before
 unrealzied gains (losses)
 on securities held for sale 47,460 53,064 35,073
 Unrealized gains (losses) on
 securities held for sale -- -- --
 Noninterest income 47,460 53,064 35,073
 Noninterest expense 92,135 88,515 83,979
 Net income (loss) 4,739 4,628 5,729
 Per Share .11 .11 .14
 Dividends per share .11 .11 .11
 Average Balances
 Assets $9,597,436 $10,006,094 $9,847,091
 Earning assets 8,819,715 9,232,742 9,078,107
 Loans net of unearned income 6,400,203 6,581,604 6,753,835
 Deposits 7,724,885 7,776,595 7,905,085
 Stockholders' equity 566,341 566,823 563,172
 Period-end Balances
 Assets $9,710,955 $9,693,806 $9,926,466
 Earning assets 8,699,991 8,799,076 9,160,643
 Loans, net of unearned
 income 6,324,321 6,553,802 6,704,091
 Deposits 7,871,049 7,804,204 7,822,420
 Stockholders' equity 566,384 566,063 564,992
 Capital
 Average primary shares
 (year-to-date) 38,363,735 38,314,600 38,264,088
 Tier I capital ratio (Pct.) 6.75 6.51 6.43
 Total risk-based capital ratio 9.46 9.18 9.09
 Leverage ratio 5.30 5.29 5.14
 Equity to assets 5.83 5.84 5.69
 Book value per share $ 14.34 $ 14.37 $ 14.37
 Credit Quality
 Allowance for credit losses $199,654 $ 233,431 $224,475
 As a percent of period-end
 loans 3.16 3.56 3.35
 As a percent of nonaccruing
 loans 78 85 88
 As a percent of nonaccruing
 loans plus foreclosed
 properties 55 60 62
 Net charge-offs
 (year-to-date) $176,461 $110,684 $ 69,636
 As a percent of
 average loans 2.65 2.18 2.03
 90 days past due and still
 accruing $ 46,113 $ 61,102 $ 77,348
 As a percent of period-end
 loans .73 .93 1.15
 Nonaccruing loans $257,076 $274,655 $255,773
 Foreclosed properties
 (lower of cost or fair value) 106,451 116,098 106,240
 Nonaccruing loans
 plus foreclosed properties $363,527 $390,753 $362,013
 As a percent of loans plus
 foreclosed properties 5.65 5.86 5.32
 Restructured loans $ 43,822 $ 25,145 $ 10,083
 Selected Ratios
 (A)(Percent)
 Return on average assets .20 .18 .23
 Return on average common equity 3.19 3.10 3.92
 Return on average total equity 3.35 3.27 4.07
 Dividends declared to net income:
 On common stock 89 91 74
 On common and preferred stock 96 99 79
 Internal capital generation rate .1 -- .8
 Net overhead ratio 1.86 1.42 1.99
 N/M - Not meaningful
 (A) Annualized
 (B) Restated
 -0- 7/28/92
 /CONTACT: E. Glenn Bowman, Senior Vice President and Treasurer, Dominion Bankshares Corporation, 703-563-7719/
 (DMBK) CO: Dominion Bankshares Corporation ST: Virginia IN: FIN SU: ERN


CM -- CH006 -- 4230 07/28/92 16:13 EDT
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