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FIRST CONSTITUTION FINANCIAL REPORTS FIRST QUARTER RESULTS

 FIRST CONSTITUTION FINANCIAL REPORTS FIRST QUARTER RESULTS
 NEW HAVEN, Conn., April 24 /PRNewswire/ -- First Constitution Financial Corporation (NASDAQ: FCON), parent company of First Constitution Bank, reported a first-quarter net loss of $11.4 million, which compares with a loss of $9.4 million in the first quarter a year ago. On a per-share basis, the 1992 first quarter net loss was $1.04, compared with 86 cents last year. Before the cumulative effect of a tax-related change in accounting principle, this quarter's loss was $19.9 million, or $1.82 per share, according to John J. Crawford, president and chief executive officer.
 This year's first-quarter net loss includes a provision for loan losses of $16.4 million, compared with $7.0 million in the same period a year ago. For the quarter, expenses of real estate owned were $6.9 million, which includes net write-downs of $4.3 million. The reserve for loan losses was $57.4 million, after taking net charge-offs of $22.8 million, compared with a reserve of $84.4 million a year ago. The ratio of reserves for loan losses to non-accruing loans was 40 percent at March 31 this year, compared with 42 percent on the same date last year.
 Non-accruing assets were $258.2 million at March 31, compared with $289.9 million last year. Troubled debt restructurings, on which interest is earned at less than original rates, were $12.8 million at the end of the 1992 first quarter. Non-accruing assets include $43.7 million of residential real estate loans, $82.8 million of commercial real estate loans, and $114.5 million of property acquired through foreclosure and in-substance foreclosures.
 "While we added to non-performing loans in this year's first quarter, mainly in commercial real estate, we take some encouragement from early signs of an improving economic climate -- even though Connecticut is still behind national trends. We are continuing a broad approach to solving our financial problems," Crawford said. "With our investment bankers, Rothschild Inc., we are developing our plan to achieve a bank Tier 1 capital-to-assets, or leverage, ratio of 4.0 percent by the end of 1992 -- as specified in a cease-and-desist order recently entered into with the Federal Deposit Insurance Corporation.
 "We are focusing on improving our balance sheet by selling significant non-performing assets at a discount, which would be done in conjunction with a recapitalization, infusing funds from a private investor or perhaps another banking institution. This would allow us to better employ our strengths to maximize the potential of our franchise," he said.
 "An additional strategy under consideration for improving our capital ratios is downsizing the bank by selling some earning assets. For example, our March 31 balance sheet shows $375 million of 'assets held for sale' -- consisting of $275 million of performing loans, with the balance in bank investments. If these assets had been sold by March 31 this year, our consolidated equity-to-asset ratio would have been 3.7 percent instead of the 3.0 percent we are reporting for the 1992 first quarter. Because the necessary analysis and planning are under way right now, it is too early to predict which strategies we finally will adopt," Crawford explained.
 "Included in this year's first-quarter financial statements is a tax benefit of $8.5 million, resulting from our adoption for public reporting purposes of Financial Accounting Standard No. 109," he said. "The $8.5 million represents the current estimate of federal income taxes paid in prior years, which are expected to be recovered when we file our 1992 income tax return. FDIC regulatory reporting, however does not yet permit including the tax benefit in computing any capital ratios. Using the method defined in the FDIC regulatory order that was effective March 22,the leverage ratio at March 31 was 2.1 percent. Had we included the $8.5 million tax benefit in the computation, the Tier 1 leverage ratio would have been 2.6 percent. We hope the FDIC will soon permit the adoption of this accounting standard for regulatory purposes."
 The ratio of total bank capital to risk-weighted assets was 4.5 percent at March 31, 1992. The regulatory requirement is 7.25 percent. Consolidated shareholders' equity was $56.4 million, compared with $115.0 million a year ago and $67.8 million at Dec. 31, 1991. Book value per share at the end of the 1992 first quarter was $5.15, based on 10,956,519 shares outstanding.
 For this year's March 31 quarter, net interest income before the provision was $6.4 million, compared with $7.1 million last year. Non-interest income was $5.3 million, compared with last year's $1.3 million. As previously reported, during the 1992 first quarter the bank sold a portfolio of home equity second-mortgage loans for a one-time gain of $3.2 million.
 Total loans at March 31, excluding the $275 million held for sale, were $1.0 billion, compared with last year's $1.7 billion. Total assets were $1.9 billion, compared with $2.1 billion at March 31, 1991.
 In March, the bank announced its intention to consolidate its branch network by closing five offices in Fairfield County in the early summer of 1992, subject to regulatory approval. Afterward, the bank will be operating 16 branches, 14 in New Haven County and two in Fairfield County.
 First Constitution Financial Corporation shares are traded on the Nasdaq Stock Market. The trading symbol is FCON.
 FIRST CONSTITUTION FINANCIAL CORPORATION AND SUBSIDIARY
 Consolidated Balance Sheets
 (In thousands except for share data)
 3/31/92 12/31/91 3/31/91
 Assets
 Federal funds and other
 short-term investments $9,202 $12,711 $6,251
 Assets held for sale 374,662 142,392 12,776
 Investment securities 28,408 38,119 36,910
 Mortgage-backed securities 291,007 308,151 192,630
 Loans receivable, net:
 Residential real estate loans 632,612 903,056 1,060,227
 Commercial real estate loans 279,829 315,392 385,234
 Consumer loans 63,630 68,320 193,524
 Commercial loans 68,126 74,650 95,632
 Total loans, net of loans in
 process and unearned income 1,044,197 1,361,418 1,734,617
 Less reserve for loan losses (57,368) (63,743) (84,422)
 Total loans receivable, net 986,829 1,297,675 1,650,195
 Real estate investments, net 21,089 22,813 17,540
 Property acquired through foreclosure
 and in-substance foreclosures 114,484 95,627 88,390
 Proceeds receivable from
 sale of securities -- 97,749 --
 Cash and amounts due from
 depository institutions 19,616 18,215 9,060
 Other assets 51,240 46,068 65,972
 Total assets $1,896,537 $2,079,520 $2,079,724
 Liabilities and Shareholders' Equity
 Liabilities
 Deposits:
 Demand deposit accounts $13,620 $15,483 $13,506
 Regular savings accounts 238,768 219,808 154,924
 N.O.W. accounts 75,311 77,462 65,113
 Money market deposit accounts 89,398 98,328 104,347
 Certificate accounts 1,050,914 1,124,493 1,261,993
 Total deposits 1,468,011 1,535,574 1,599,883
 Borrowings 358,817 453,728 350,823
 Advance payments by borrowers
 for taxes and insurance 3,710 9,214 4,422
 Total deposits and interest-
 bearing liabilities 1,830,538 1,998,516 1,955,128
 Other liabilities 9,581 13,177 9,607
 Total liabilities 1,840,119 2,011,693 1,964,735
 Shareholders' equity
 Preferred shares $1.00 par value
 Authorized-3 million shares
 Issued-none --- --- ---
 Common shares $1.00 par value
 Authorized-20 million shares
 Issued-11,058,019, 11,058,019
 and 11,051,833 shares,
 respectively
 Outstanding-10,956,519, 10,956,519
 and 10,950,333, respectively 11,058 11,058 11,052
 Additional paid-in capital 150,313 150,313 150,312
 Retained deficit (130,353) (91,944) (44,775)
 Less treasury stock-101,500
 shares at cost (1,600) (1,600) (1,600)
 Total shareholders' equity 56,418 67,827 114,989
 Total liabilities and
 shareholders' equity $1,896,537 $2,079,520 $2,079,724
 First Constitution Financial Corporation and Subsidiary
 Consolidated Statements of Operations
 (in thousands except for share data)
 Three Months
 ended March 31,
 1992 1991
 Interest income:
 Investments $1,254 $1,447
 Mortgage-backed securities 6,910 3,811
 Loans 26,993 39,581
 Total interest income 35,157 44,839
 Interest expense:
 Interest on deposits 23,291 30,300
 Interest on borrowings 5,421 7,448
 Total interest expense 28,712 37,748
 Net interest income 6,445 7,091
 Provision for loan losses 16,411 7,000
 Net interest income (loss)
 after provision (9,966) 91
 Non-interest income:
 Fees and service charges 1,139 899
 Net gain on securities 232 ---
 Income from real estate
 investments 214 347
 Other income 3,738 94
 Total non-interest income 5,323 1,340
 Income (loss) before non-interest
 expense (4,643) 1,431
 Non-interest expense:
 Compensation, taxes and benefits 3,174 4,277
 Office occupancy 867 799
 Furniture and fixtures 463 449
 Professional fees 1,097 940
 Federal insurance premium 955 788
 Net cost of real estate owned 6,948 1,732
 Other 1,674 1,851
 Total non-interest expense 15,178 10,836
 Loss before income taxes and
 cumulative effect of change in
 accounting principle (19,821) (9,405)
 Income tax expense 90 42
 Loss before cumulative effect of
 change in accounting principle (19,911) (9,447)
 Cumulative effect of change
 in accounting principle 8,500 ---
 Net Loss (11,411) (9,447)
 Net Loss per share:
 Loss before cumulative effect of
 change in accounting principle (1.82) (0.86)
 Cumulative effect of change in
 accounting principle .78 --
 Net Loss per share (1.04) (0.86)
 Weighted average shares
 outstanding-(a) 10,956,519 10,950,333
 Note (a)-Weighted average shares outstanding does not include stock options outstanding, which are antidilutive.
 FIRST CONSTITUTION FINANCIAL CORPORATION AND SUBSIDIARY
 Supplementary Financial Data
 Three Months
 ended March 31,
 1992 1991
 Profitability (annualized):
 Average yields
 Loans 7.78 pct 8.91 pct
 Mortgaged-backed securities 7.80 9.28
 Investments 5.39 8.68
 Combined 7.66 8.94
 Effective interest rates
 Deposits 6.26 7.78
 Borrowings 5.94 8.18
 Combined 6.20 7.86
 Average interest rate spread 1.46 1.08
 Net interest margin 1.37 1.31
 Non-interest expenses to avg. assets 3.10 2.07
 Per share:
 Book value (end of period) $5.15 $10.50
 Earnings $(1.04) $(0.86)
 Other:
 Shareholders' equity to total
 assets (end of period) 2.97 pct 5.53 pct
 Total bank capital to risk-weighted
 assets (end of period) 4.52 7.50
 Bank Tier 1 capital to assets
 (end of period) 2.11 4.31
 Bank Tier 1 capital to quarterly
 average assets 2.03 4.29
 Loans past due 90 days or more
 to total loans (end of period)-(a) 9.01 10.31
 Non-performing assets to total
 loans, real estate investments,
 in-substance foreclosures and
 other repossessed assets
 (end of period)-(a) 18.62 15.64
 Reserve for loan losses to
 non-accruing loans 39.91 pct 41.90 pct
 Reserve for loan losses to
 non-performing assets 21.17 pct 29.12 pct
 Originations (in thousands) $33,167 $44,901
 Cumulative positive 12-month gap to
 total assets (end of period)-(b) 14.83 pct 14.54 pct
 (a)-Ratios include certain loan portfolios held for sale.
 (b)-Ratios have not been adjusted for non-accruing loans. After giving effect to non-accruing loans, the ratios are 7.73 percent and 5.47 percent at March 31, 1992 and 1991, respectively.
 -0- 4/24/92
 /CONTACT: John Rourke of First Constitution Financial, 203-782-4570/
 (FCON) CO: First Constitution Financial ST: Connecticut IN: FIN SU: ERN


SH -- NE013 -- 2749 04/24/92 17:43 EDT
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