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FLAGSHIP FINANCIAL REPORTS SECOND QUARTER RESULTS

 FLAGSHIP FINANCIAL REPORTS SECOND QUARTER RESULTS
 JENKINTOWN, Pa., Aug. 14 /PRNewswire/ -- Flagship Financial Corp.


(NASDAQ: FLGF) announced today that net income for the three months ended June 30, 1992, was $603,000 or $.17 per share.
 This compares with a $2.6 million loss or $.75 per share for the same period in 1991. For the six months ended June 30, 1992, the company reported a net loss of $437,000 or $.13 per share as compared to a net loss of $991,000 or $.29 per share for the same period in 1991.
 Commenting on the results, Raymond W. McConnell, chairman and acting chief executive officer, said, "We are comforted by the second quarter earnings, and believe we are beginning to see the results of our loan workout efforts. We remain cautiously optimistic about the economic recovery for real estate."
 Nonperforming assets at June 30, 1992, decreased to $33.5 million, or 3.91 percent of total assets, from $40.6 million, or 4.65 percent of total assets at March 31, 1992. Nonperforming assets at June 30, 1991, were $22.3 million or 2.31 percent of total assets. The decrease in nonperforming assets from March 31, 1992, to June 30, 1992, is attributed primarily to a reduction in real estate owned that resulted from $5.3 million in cash payments and to a lesser extent to $1.5 million in net charge-offs which reduced the carrying value of certain assets.
 Total assets decreased to $856.9 million at June 30, 1992, from $871.9 million at March 31, 1992. The ratio of allowance for loan losses to nonperforming loans increased slightly from 84.18 percent at March 31, 1992, to 85.29 percent at June 30, 1992, and remains below the 116.56 percent level at June 30, 1991.
 Net interest income for the second quarter of 1992 remained at the same $7.1 million level as in the second quarter of 1991. The increase in net interest income for the second quarter of 1992 compared to the first quarter of 1992 is due primarily to a higher net interest margin and a lower level of nonperforming assets.
 Noninterest income for the second quarter of 1992 remained below the second quarter 1991 level when noninterest income increased due to a $484,000 gain from the sale of fixed-rate mortgage loans. Noninterest income increased for the second quarter of 1992 from the first quarter of 1992 largely as a result of a write-down in a joint venture real estate investment during the first quarter and a gain on the sale of equity securities during the second quarter. Management continues to reduce investment in joint venture real state-development activities.
 Noninterest expenses for the second quarter of 1992 increased to $7.1 million from $5.5 million for the second quarter of 1991. The increase is primarily a result of a provision for loss on real estate owned.
 At quarter end, the company's ratio of tangible capital to tangible assets was 7.68 percent. Both of the company's thrift subsidiaries continue to exceed the fully phased-in capital requirements of the federal government.
 At a recent meeting, the company's board of directors declared a regular quarterly dividend of $.10 per share. This dividend will be paid on Aug. 21, 1992, to common stockholders of record on Aug. 7.
 As previously reported the company has signed a definitive agreement with PNC Financial Corp (NYSE: PNC) for PNC to acquire Flagship. Under terms of the agreement, PNC will pay Flagship shareholders $13.05 cash per common share. The transaction is subject to approval by certain regulatory authorities.
 Flagship Financial Corp., which ranks among the 10 largest publicly traded thrift institutions in Pennsylvania, conducts business through its wholly owned subsidiaries First American Savings and Brandywine Savings Bank. First American operates 12 full-service offices in southeastern Pennsylvania. Brandywine Savings operates nine full- service branches in Chester County, Pa.
 FLAGSHIP FINANCIAL CORP.
 (Unaudited; dollars in thousands, except per-share data)
 Periods ended Quarter Six months
 June 30 1992 1991 1992 1991
 Operating data:
 Total interest income $17,811 $22,799 $36,635 $45,400
 Total interest expense 10,695 15,656 22,916 31,190
 Net interest income 7,116 7,143 13,719 14,210
 Provision for loan losses 165 4,374 331 4,729
 Net interest income after
 provision for loan losses 6,951 2,769 13,388 9,481
 Non-interest income:
 Gain on sale of loans
 and securities 360 484 365 871
 Equity in income (loss)
 from joint ventures 30 63 (501) 117
 Other 387 478 863 921
 Total non-interest income 777 1,025 727 1,909
 Non-interest expenses:
 Salaries and employee
 benefits 2,012 2,199 4,233 4,371
 Occupancy and equipment 999 994 2,023 1,985
 Deposit insurance premiums 408 434 816 868
 Advertising and marketing 52 239 162 434
 Provision for loss on
 real estate owned 1,653 12 3,853 12
 Amortization of excess cost
 over fair value of net
 assets acquired 220 232 439 463
 Other operating expenses 1,722 1,425 3,024 2,449
 Total non-interest expenses 7,066 5,535 14,550 10,582
 Income (loss) before income
 taxes and utilization of
 tax loss carryforward 662 (1,741) (435) 808
 Income tax expense 108 905 100 1,879
 Income (loss) before
 utilization of tax
 loss carryforward 554 (2,646) (535) (1,071)
 Utilization of tax loss
 carryforward 49 39 98 80
 Net income (loss) 603 (2,607) (437) (991)
 Earnings (loss) per common
 share:
 Before utilization of tax
 loss carryforward $.16 ($.76) ($.15) ($.31)
 Utilization of tax loss
 carryforward .01 .01 .02 .02
 Earnings (loss)
 per common share .17 (.75) (.13) (.29)
 Net interest rate
 spread (pct.) 3.14 2.50 2.94 2.49
 Net interest margin (pct.) 3.43 2.99 3.23 2.99
 Return on average assets (pct.) .28 (1.07) (.10) (.21)
 Return on average
 equity (pct.) 3.34 (12.58) (1.20) (2.40)
 FLAGSHIP FINANCIAL CORP.
 Financial Condition Data
 At June 30 1992 1991
 Total assets $856,890 $966,236
 Loans receivable, net 546,213 649,322
 Investment securities and
 interest-bearing deposits 162,185 148,889
 Mortgage-backed securities 91,397 109,278
 Total deposits 699,486 758,259
 Total borrowings 68,625 110,077
 Total capital 72,278 80,454
 Tangible capital to tangible
 assets (pct.) 7.68 7.54
 Tangible book value per common
 share $18.70 $20.88
 Non-performing assets to total
 assets (pct.) 3.91 2.31
 Allowance for loan losses to
 total loans (pct.) 2.51 1.68
 Allowance for loan losses to
 nonperforming loans (pct.) 85.29 116.56
 /delval/
 -0- 8/14/92
 /CONTACT: Robert K. Lockyer, CFO, 215-576-3075, or Joseph F. Kubiak, Investor Relations, 215-576-5900, both of Flagship Financial/
 (FLGF PNC) CO: Flagship Financial Corporation; PNC Financial Corp ST: Pennsylvania IN: FIN SU: ERN DIV


MK-MP -- PH018 -- 0144 08/14/92 16:03 EDT
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