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HARRIS BANKCORP REPORTS RESULTS

 HARRIS BANKCORP REPORTS RESULTS
 CHICAGO, July 17 /PRNewswire/ -- Harris Bankcorp today announced


second quarter earnings of $26,446,000, up 14 percent from 1991 second quarter net income of $23,207,000. B. Kenneth West, chairman and chief executive officer, attributed the year-to-year earnings increase largely to higher levels of net interest income and gains recognized in conjunction with sales of claims related to lesser developed countries.
 Second quarter 1992 net interest income on a fully taxable equivalent basis was $123.7 million, up 8 percent from $114.6 million reported in the second quarter of 1991. Average earning assets rose 8 percent from $11.08 billion to $11.95 billion in 1992. Growth in the investment portfolio was the single largest contributing factor to that increase. Net interest margin, the other principal determinant of net interest income, was essentially unchanged at 4.16 percent.
 Second quarter results were impacted by two large nonrecurring transactions. Noninterest income included realized net gains of $15.8 million from the sale of most of the corporation's remaining claims in Mexico and Brazil. The current quarter also contained a special $11.8 million charge for the writedown of land and related pre- construction expenditures originally capitalized in connection with the previously planned construction of a new operations center in Chicago. Management determined that a writedown was necessary because of the uncertainty of proceeding with the project in the near future. Excluding the effect of these special items, noninterest income would have declined by 3 percent while noninterest expenses would have risen by approximately 7 percent.
 Noninterest income included losses of $3.1 million from bond and financial instrument trading activities, compared to a year ago when those businesses operated at an essentially break-even level. Charge card fees and net gains from sales of portfolio securities declined by $1.9 million and $1.1 million, respectively. Service fees and charges rose $4.1 million or 28 percent during the quarter.
 Second quarter noninterest expenses rose 16 percent from 1991. In addition to the aforementioned special $11.8 million charge for the writedown of land and related capitalized costs, other reasons for this increase included higher salaries and associated employee benefits, costs associated with other real estate owned and an industry-wide increase in FDIC deposit insurance premiums. Income tax declined $1.6 million during the current quarter, despite higher pretax income. The primary reason for the reduction in tax expense was the recognition of AMT credit carryforwards from prior years.
 The second quarter 1992 provision for credit losses of $21.7 million was down 2 percent from the second quarter of 1991. Net loan charge- offs decreased from $22.0 million to $15.4 million during the current quarter. The decline in net charge-offs is primarily attributable to a recovery associated with loans made to a lesser developed country.
 At June 30, 1992, the allowance for possible credit losses was $136.7 million, equal to 1.83 percent of total loans outstanding, compared with $127.9 million or 1.69 percent of loans at the end of the 1991 second quarter.
 Nonperforming assets at June 30, 1992, totaled $184.4 million or 2.5 percent of total loans, down from $214.3 million or 2.8 percent at June 30, 1991, but up from $165.5 million reported at March 31, 1992. The year-to-year decrease primarily resulted from restoring to performing status during the 1991 third quarter one large credit classified as a highly leveraged transaction.
 At June 30, 1992, equity capital of Harris Bankcorp amounted to $886 million compared to $822 million one year earlier. The increase resulted from earnings for the prior 12 months reduced by dividends of $42 million. Harris Bankcorp's regulatory capital leverage ratio was 6.26 percent for the second quarter of 1992, up from 6.21 percent in the same quarter one year earlier. While regulators have not prescribed specific regulatory minimums, most bank holding companies will be expected to maintain leverage capital ratios between 4 and 5 percent.
 The annualized return on average stockholders' equity increased to 12.07 percent in the current quarter from 11.51 percent a year ago while the annualized second quarter 1992 return on assets was .77 percent compared to .73 percent in 1991.
 For the first six months of 1992, net income was $49,684,000, a 5 percent increase from the same period a year earlier. Factors contributing to 1992 earnings growth included higher levels of both net interest income and noninterest sources of revenue, including the aforementioned gains on sales of claims related to lesser developed countries.
 Net interest income in the current six-month period increased 8 percent to $244.8 million from the comparable 1991 period. Net interest margin rose from 4.11 to 4.15 percent while average earning assets increased 7 percent from $11.10 billion to $11.83 billion. Noninterest income advanced 15 percent to $167.4 million in 1992. Aside from LDC gains, revenue from service fees and charges rose $13.2 million. Approximately half of this increase resulted from a change in the corporation's accounting for recognition of certain types of fees.
 HARRIS BANKCORP, INC. CONSOLIDATED EARNINGS HIGHLIGHTS
 (In thousands, except ratios and per share data)
 Six Months Ended June 30, Percent
 1992 1991 Change
 Net interest income $244,916 $207,473 8
 Net interest income
 (fully taxable equivalent) 244,804 227,142 8
 Provision for credit losses 43,555 39,115 11
 Noninterest income 167,376 145,661 15
 Noninterest expenses 290,250 253,509 14
 Net income 49,684 47,203 5
 Net income per share 7.45 7.08 5
 Return on average assets .73 percent .74 percent
 Return on average equity 11.46 percent 11.83 percent
 Quarter ended June 30 Percent
 1992 1991 Change
 Net interest income $113,510 $104,783 8
 Net interest income
 (fully taxable equivalent) 123,747 114,602 8
 Provision for credit losses 21,705 22,180 -2
 Noninterest income 90,346 77,100 17
 Noninterest expenses 150,650 129,848 16
 Net income 26,446 23,207 14
 Net income per share 3.96 3.48 14
 Return on average assets .77 percent .73 percent
 Return on average equity 12.07 percent 11.51 percent
 CONSOLIDATED STATISTICS (In millions)
 At June 30, Percent
 1992 1991 Change
 Money market assets $ 694 $ 1,417 -51
 Loans, net of unearned income 7,460 7,579 -2
 Deposits 8,734 9,188 -5
 Stockholder's equity 886 822 8
 Total assets 13,248 13,064 1
 Year to date
 Daily Average Balances Percent
 1992 1991 Change
 Money market assets $ 1,055 $ 1,180 -11
 Loans, net of unearned income 7,490 7,420 1
 Deposits 8,972 9,072 -1
 Stockholder's equity 872 804 8
 Total assets 13,604 12,849 5
 -0- 7/17/92
 /CONTACT: Mary Ullrich, 312-461-6905 or Paul Skubic, 312-461-2220, both of Harris Bankcorp/ CO: Harris Bankcorp ST: Illinois IN: FIN SU: ERN


SH -- NY034 -- 0233 07/17/92 12:00 EDT
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