First Interstate CEO meets analysts, says liquidity is the key to maintaining control.First Interstate CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. meets analysts, says liquidity is the key to maintaining control Carson allows bank must reduce operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. Southland real estate will not suffer like real estate in Arizona and Texas during the current economic downturn, said First Interstate Bancorp First Interstate Bancorp was a bank based in the United States that was taken over in 1996 by Wells Fargo. It was headquartered in Los Angeles. The name has continued to be used in the banking world by used after the merger by First Interstate Bank who had been using the Chairman and CEO Edward Carson in a speech to analysts and pension fund managers last week. "The hysteria is not warranted by events," Carson told a meeting of the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. Society of Financial Analysts at the Biltmore Hotel Biltmore Hotel is the name of a hotel chain created by hotel magnate John McEntee Bowman. The name evokes the Vanderbilt family's Biltmore Estate, whose buildings and gardens within are privately owned historical landmarks and tourist attractions in Asheville, North . Continuing in-migration into the state will spur demand for real estate, Carson said, acknowledging that a recession is under way. Carson also said that management decisions which have built up the bank's liquidity may help it endure a recession. "Liquidity is the key to maintaining control of our company," said Carson. "We have to tighten up Verb 1. tighten up - restrict; "Tighten the rules"; "stiffen the regulations" constrain, stiffen, tighten confine, limit, throttle, trammel, restrain, restrict, bound - place limits on (extent or access); "restrict the use of this parking lot"; "limit the credit extension and get expenses under control." Carson noted that the bank has already jettisoned a number of non-core subsidiaries and has consolidated back-shop operations in nine states. The company has restructured its banking operations in Utah, Montana, Idaho, Wyoming and Oklahoma and sold operations including its non-relationship credit card business, its Commercial Alliance business, its California and Texas indirect auto loan operations, its junk bond junk bond, a bond that involves greater than usual risk as an investment and pays a relatively high rate of interest, typically issued by a company lacking an established earnings history or having a questionable credit history. portfolio and its NOVA financial services operation. First Interstate is also selling banks in New Mexico and Colorado. "We are clearing out the balance sheet of those things that provide poorer yields. We are not cherry-picking, we are cleaning house," he said. Carson, who succeeded J.J. Pinola in January, also said that an optimistic sign for the company is that it has reduced its non-performing assets -- mostly Southwest real estate and loans -- to $1.88 billion from $2.2 billion in 1989. It will still require a hefty $800 million to administer those assets in fiscal year 1990, including opportunity costs Opportunity costs The difference in the actual performance of a particular investment and some other desired investment adjusted for fixed costs and execution costs. It often refers to the most valuable alternative that is given up. . Brokers and pension fund managers generally said Carson gave a frank portrayal of the bank's difficulties. "I was curious whether he thought California would suffer the same real estate problems as Arizona and Texas and he didn't," said Carl Dorf, a portfolio manager and stock analyst at Marina del Rey-based Dorf & Associates. Dorf said, however, that he has not picked the stock for his portfolio and would not recommend it. "Their capital, even with the (recent) addition, is on the thin side. He seems to be honest and forthright, but he has a lot of tough problems." First Interstate's stock was trading near $28 last week, up slightly from its 52-week low of $26.25. |
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