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FIRST VIRGINIA REPORTS THIRD STRAIGHT QUARTER OF RECORD EARNINGS -- UP 30 PERCENT

 FIRST VIRGINIA REPORTS THIRD STRAIGHT QUARTER OF RECORD EARNINGS --
 UP 30 PERCENT
 FALLS CHURCH, Va., April 9 /PRNewswire/ -- First Virginia Banks, Inc. (NYSE: FVB), today reported record earnings for the third consecutive quarter.
 For the first quarter of 1992, net income was $21,521,000 or $1 per share, up 30 percent from the $16,618,000, or $.78 per share reported for the first quarter of 1991 and up 16 percent above the $18,592,000 or $.87 per share reported for the fourth quarter of 1991. The corporation previously reported record earnings for 1991 and has been largely unaffected by the problems experienced by other financial institutions in the last several years.
 Robert H. Zalokar, chairman and chief executive officer, attributed the dramatic increase in earnings to an improvement in the net interest margin of 35 basis points to 5.30 percent and to a 15 percent growth in average assets fueled by strong growth in core deposits. The net interest margin improvement has occurred because the corporation's cost of funds has declined at a faster rate than the yield on its earning assets.
 Net income for the first quarter of 1992 was equal to 1.39 percent of average total assets and 15.73 percent of average stockholders' equity compared with ratios of 1.23 percent and 13.23 percent, respectively, for the first quarter of 1991. These ratios place the company in the top 5 percent of all banks in its national and southern regional peer groups.
 Total assets at March 31, 1992, were $6.557 billion, up 18 percent from the $5.580 billion reported at the end of the previous year's first quarter. Deposits totaled $5.777 billion, up 19 percent from the $4.873 billion reported at the end of the first quarter of 1991 and the $5.350 billion at Dec. 31, 1991. The majority of the growth in deposits occurred in lower-cost core deposits such as transaction and consumer savings accounts. A portion of the growth in deposits was due to the transfer of funds by customers of other financial institutions who have been attracted by First Virginia's reputation for safety and soundness, and the growth was particularly strong in the Northern Virginia area.
 Moreover, in March, the corporation acquired $270 million in deposits and two offices from the failed CorEast Federal Savings Bank which more than doubled its share of the Roanoke Valley market. In addition, the corporation also acquired $8 million in deposits and one office from the failed Augusta Federal Savings Bank in Catonsville, a suburb of Baltimore.
 The growth in earnings has come despite a continued softness in loan demand, as loans outstanding advanced 4 percent at March 31, 1992, to $3.566 billion compared to March of 1991 when they amounted to $3.416 billion. The corporation has begun to see a net increase in loan demand in the last two months in the residential real estate and automobile loan areas. "This increase is particularly encouraging," remarked Zalokar, "as First Virginia has traditionally concentrated on consumer and community banking."
 On March 31, nonperforming assets (nonaccruing and restructured loans and foreclosed real estate) were $35,185,000 or .98 percent of total loans. These amounts were essentially unchanged from the Dec. 31, 1991, figures but were down from the $37,583,000 and the 1.10 percent of total loans as of March 31, 1991. First Virginia's nonperformers are less than one-third of the levels of similar southern regional banking organizations.
 Annualized net charge-offs for the first quarter were .34 percent, up slightly from the .31 percent recorded in the first quarter of 1991 but down from the .38 percent registered for the full year 1991. The allowance for loan losses stood at $45.8 million or 1.28 percent of total loans at March 31, 1992, and is equal to 130 percent of nonperforming loans and 383 percent of the first quarter's annualized charge-offs.
 Stockholders' equity totaled $555 million on March 31, 1992, up 9 percent from the previous year's first quarter, and the Tier I or core capital ratio is more than three times the required regulatory minimum. Total equity to total assets at March 31, 1992, was 8.46 percent, compared to 9.09 percent in the previous year. The decline was due to the rapid growth in the corporation's assets which have grown at a faster pace than capital.
 Currently there are 20 banks in the First Virginia Banks, Inc., group and they operate 318 offices. Sixteen of the banks with 266 offices are in Virginia, two banks with 36 offices are in Maryland and two banks with 16 offices are in Tennessee.
 FIRST VIRGINIA BANKS, INC.
 Financial Data
 (Dollars in thousands, except per share data)
 First Quarter
 1992 1991
 For the period ended March 31:
 Interest income $129,748 $125,349
 Interest expense 56,289 65,746
 Net interest income 73,459 59,603
 Provision for loan losses 3,954 2,423
 Other income 18,362 16,946
 Other expenses 57,173 51,143
 Provision for income taxes 9,173 6,365
 Net income $ 21,521 $ 16,618
 Net income per common share $1.00 $0.78
 Earnings per share of common stock for the three months ended March 31, after giving effect to dividends on preferred stock of $17,000 in 1992 and $19,000 in 1991, are based on 21,465,000 and 21,358,000 average shares outstanding, respectively.
 Average earning assets
 (in thousands) $5,710,334 $4,973,586
 Yield on earning assets (in percent) 9.26 10.31
 Average interest-bearing deposits
 and borrowed funds $4,778,231 $4,121,207
 Average interest cost (in percent) 4.74 6.47
 Net yield on earning assets (in pct) 5.30 4.95
 Average assets $6,181,812 $5,386,163
 Return on average assets (in pct) 1.39 1.23
 Average stockholders' equity $ 547,262 $ 502,589
 Return on average equity (in pct) $15.73 $13.23
 As of March 31:
 Total assets $6,557,209 $5,579,506
 Noninterest-bearing deposits 893,856 747,417
 Interest-bearing deposits 4,883,158 4,125,297
 Total deposits 5,777,014 4,872,714
 Loans (net) 3,520,435 3,372,720
 Stockholders' equity $ 554,873 $ 507,270
 Book value per share $25.86 $23.72
 -0- 4/9/92
 /CONTACT: Richard Bowman of First Virginia Banks, 703-241-3685/
 (FVB) CO: First Virginia Banks, Inc. ST: Virginia IN: FIN SU: ERN


GK-OS -- NY047 -- 6754 04/09/92 11:55 EDT
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Date:Apr 9, 1992
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