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JOHNSTOWN SAVINGS BANK ANNOUNCES 1992 NET INCOME

 JOHNSTOWN, Pa., Feb. 2 /PRNewswire/ -- Johnstown Savings Bank, FSB (NASDAQ: JSBK) today announced consolidated net income of $2,582,000 or $1.33 per share for the year ended Dec. 31, 1992. 1992 net income increased $971,000 or 60.3 percent, as compared to net income of $1,612,000 or $0.83 per share for the year ended Dec. 31, 1991. The 1992 net income represents an 0.85 percent return on average assets as compared with a 0.56 percent return in 1991. The bank's net income for the year ended Dec. 31, 1992, was at its highest annual level since the bank converted to a stock institution in 1986.
 The bank also recorded its 12th consecutive quarter of increasing profitability. For the three months ended Dec. 31, 1992, the bank posted consolidated net income of $716,000 or $0.37 per share, an increase of $268,000 or 60.1 percent, as compared to net income of $448,000 or $0.23 per share for the same three-month period in 1991. The bank's book value per share increased from $11.23 at Dec. 31, 1991, to $12.56 at Dec. 31, 1992.
 The bank also announced that its total assets increased 9.1 percent to $320.4 million at Dec. 31, 1992, as compared to $293.6 million at Dec. 31, 1991. The bank's capital to assets ratio increased from 7.4 percent at Dec. 31, 1991, to 7.6 percent at Dec. 31, 1992. The bank's capital ratios, as computed under regulatory guidelines, are all in excess of required levels.
 Patrick J. Coyne, president and chief executive officer, characterized 1992 as a year of increased profitability and renewed growth. Coyne noted that, during 1992, the bank opened its sixth branch office location in Greater Johnstown, increased its net income over 60 percent and increased its asset size more than 9 percent. He further noted that, in 1992, the closing price of the bank's common stock rose 75 percent from $5.00 ahe current recognition of future tax benefits under an adopted change in accounting method and gains on the sale of securities. Net interest margin, before provisions for loan losses, increased 25.6 percent from $8.4 million in 1991 to $10.5 million in 1992, due primarily to a favorable interest rate environment and management's successful efforts to restructure the bank's liabilities, thereby reducing its overall cost of funds.
 During the fourth quarter of 1992, the bank adopted Statement of Financial Accounting Standards No. 109 (SFAS-109), "Accounting for Income Taxes." Adoption of this change in accounting method provided a net nonrecurring benefit of $2.4 million in 1992. Under Generally Accepted Accounting Principles (GAAP), all business entities must adopt SFAS-109 no later than 1993. Coyne stated that management elected to adopt SFAS-109 in 1992 in order to reduce Pennsylvania income taxes in future periods. By recognizing the effects of the accounting change in 1992, the bank was able to take advantage of net operating loss tax carryforward provisions in the Pennsylvania tax code. These tax carryforward provisions would have otherwise expired unused on Dec. 31, 1992. He explained that SFAS-109 requires current-year recognition of the net income effect of future tax benefits, such as net operating and capital loss carryforwards and certain timing differences between business entities' financial statements and tax returns. The adoption of SFAS-109 will require the bank to increase its provision for income taxes in future periods to levels approximating prevailing statutory rates.
 During 1992, the bank recorded gains of $742,000 on the sale of securities as compared with a recorded loss of $107,000 in 1991. During the quarter ended June 30, 1992, the bank sold $25.6 million in investment securities resulting in a net gain of $685,000. Coyne noted that these securities were sold in order to improve the position of the bank in consideration of anticipated interest rate trends.
 Partially offsetting these positive income variances in 1992 as compared with 1991 were increases in provisions for loan losses and losses associated with real estate acquired by foreclosure. During 1992, the bank increased its loan loss provision to $2.5 million as compared with $867,000 during 1991. In addition, the bank increased its provision for losses and other related charges for real estate acquired by foreclosure to $3.0 million for the 12 months ended Dec. 31, 1992, as compared with $1.3 million in 1991. Coyne stated that these increases were necessitated by continued weakness in national real estate markets and brought the bank's overall level of reserves closer to the levels of the best-managed institutions in the bank's peer group. "The fourth quarter provisions were a continuation of the management initiatives established in the preceding quarters of 1992 to improve overall asset quality," he said.
 Coyne noted that the bank's level of non-performing assets, comprised of non-accrual loans, restructured loans and real estate owned, net of applicable reserves, decreased from $15.7 million at Dec. 31, 1991, and $11.6 million at Sept. 30, 1992, to $10.7 million at Dec. 31, 1992. The bank's allowance for loan losses at Dec. 31, 1992, and Dec. 31, 1991, stood at $4.1 million or 2.6 percent and $3.0 million or 1.8 percent, respectively, of the total loan portfolio. The bank also carried allowances for losses associated with real estate acquired by foreclosure of $2.1 million at Dec. 31, 1992, as compared with $1.2 million at Dec. 31, 1991. Total real estate acquired via foreclosure, net of applicable reserves, was $4.6 million at Dec. 31, 1992, as compared to $6.2 million at Dec. 31, 1991. The bank's combined reserves for loan losses ($4.1 million) and losses associated with real estate acquired by foreclosure ($2.1 million) were $6.2 million or 47.8 percent of non-performing assets at Dec. 31, 1992.
 Coyne emphasized that valuation problems in national real estate markets remain an area of continuing concern for many financial institutions, including Johnstown Savings Bank. He stressed that the bank's management is committed to enhancing future operating results and building stockholder value through improvements in overall asset quality. Coyne stated that "Johnstown Savings has clearly made significant progress in strengthening its asset quality. However, due to the uncertainties associated with real estate valuation nationally, further restructuring of the bank's balance sheet may be required in the future to position the bank for maximum profitability and growth."
 Johnstown Savings Bank is a federally chartered, FDIC-insured savings bank which conducts its business through six offices in the Greater Johnstown area and through its wholly owned subsidiary, Standard Mortgage Corporation of Georgia, located in Atlanta.
 JOHNSTOWN SAVINGS BANK, FSB
 Summary of Operating Results
 Quarter Ended Dec. 31 1992 1991
 Net income $716,000 $448,000
 Provision for loan losses 1,430,000 60,000
 Net income per share $0.37 $0.23
 Average shares outstanding 1,940,150 1,940,150
 12 Months Ended Dec. 31 1992 1991
 Net income $2,582,000 $1,612,000
 Provision for loan losses 2,505,000 867,000
 Net benefit from change in accounting
 method for income taxes 2,403,000 0
 Earnings per share $1.33 $0.83
 Average shares outstanding 1,940,150 1,940,150
 Total assets at Dec. 31 $322,244,000 $293,623,000
 Return on average assets (ROA) (pct.) 0.85 0.56
 Return on average equity (ROE) (pct.) 11.23 7.67
 -0- 2/2/93
 /CONTACT: Patrick J. Coyne, president & CEO, or Walter F. Rusnak, senior vice president & CFO, of Johnstown Savings Bank, 814-535-8900/
 (JSBK)


CO: Johnstown Savings Bank ST: Pennsylvania IN: FIN SU: ERN

DM-KC -- PG005 -- 1655 02/02/93 08:06 EST
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Date:Feb 2, 1993
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