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MELLON REPORTS INCREASED EARNINGS IN FIRST QUARTER 1992

 MELLON REPORTS INCREASED EARNINGS IN FIRST QUARTER 1992
 /EDITORS: The full text of Mellon Bank Corporation 1991 earnings follows. Highlights are:
 -- Net Income Up 26 Percent From First Quarter of 1991
 -- Nonperforming Assets Down $65 Million, or 7 Percent, from
 Dec. 31, 1991/
 PITTSBURGH, April 21 /PRNewswire/ -- Mellon Bank Corporation (NYSE: MEL) today reported net income of $86 million for the first quarter of 1992, an increase of $18 million, or 26 percent, from $68 million in the first quarter of 1991.
 Net income per common share was $1.36 in the first quarter of 1992, up 9 percent from $1.25 in the first quarter of 1991.
 "We are pleased to have carried forward the earnings momentum that we established in 1991," said Mellon Bank Chairman Frank V. Cahouet in commenting on the first quarter 1992 results. "In fact, our first quarter earnings exceed the strong earnings we reported in each of the four quarters of 1991."
 Compared with the first quarter of 1991, the corporation's first quarter 1992 results reflected increases in net interest revenue, trading and other revenue, and service fee revenue, offset in part by increases in operating expense and the provision for loan losses.
 Net interest revenue for the quarter was $280 million, up 19 percent from $235 million in the first quarter of 1991. Trading and other revenue was $47 million in the first quarter of 1992 -- including $45 million in gains on the sale of investment securities -- compared with trading and other revenue of $7 million in the first quarter of 1991. Service fee revenue was $198 million in the first quarter of 1992, up 8 percent from the $182 million in the prior year period.
 Operating expense for the first quarter of 1992 was $367 million, compared with $304 million in the first quarter of 1991, principally reflecting a $39 million increase in the net expense of real estate acquired, as well as the corporation's acquisition of United Penn Bank in the fourth quarter of 1991. The United Penn acquisition also contributed to the first quarter 1992 increases in net interest revenue and service fee revenue.
 The provision for loan losses was $60 million in the first quarter of 1992, compared with $45 million in the prior year period. Net credit losses were $67 million, compared with $48 million in the first quarter of 1991.
 Nonperforming assets totaled $868 million at March 31, 1992, down $65 million, or 7 percent, from $933 million at Dec. 31, 1991.
 Annualized return on assets and return on common shareholders' equity were 1.12 percent and 17.62 percent, respectively, in the first quarter of 1992, compared with .94 percent and 17.54 percent, respectively, in the first quarter of 1991.
 With assets of approximately $30 billion, Mellon Bank Corporation is a major superregional bank holding company. Through its subsidiaries, it provides wholesale, middle market and retail banking, as well as numerous service products including trust and investment, cash management and financial information services.
 Detailed supplemental information follows.
 SUPPLEMENTAL INFORMATION
 Net Interest Revenue
 (dollar amounts in millions)
 Quarter ended March 31,
 1992 1991
 Net interest revenue $280 $235
 Taxable equivalent increments 3 8
 Net interest revenue
 (taxable equivalent basis) $283 $243
 Average interest-earning assets $26,922 $25,700
 Net interest margin 4.18 pct. 3.71 pct.
 Net interest margin
 (taxable equivalent basis) 4.22 pct. 3.84 pct.
 Net interest revenue increased by $45 million, or 19 percent, in the first quarter of 1992, compared with the first quarter of 1991, while the net interest margin increased by 47 basis points on a $1.2 billion higher level of average interest-earning assets. The improvement primarily reflected wider spreads as the corporation continued to effectively manage its funding positions in a lower interest rate environment in 1992. Both net interest revenue and the net interest margin also benefited from a substantial increase in the level of higher-yielding credit card receivables, resulting principally from the May 1991 credit card portfolio acquisitions within the corporation's region. The year-end 1991 acquisition of United Penn Bank (UPB), as well as a $6 million increase in loan fees, also contributed to the improved revenue compared with the prior-year period.
 Provision and Net Credit Losses
 (dollar amounts in millions)
 Quarter ended
 March 31,
 1992 1991
 Provision for
 credit losses $60 $45
 Net credit losses:
 Domestic:
 Real estate $37 $13
 Consumer credit 17 11
 Commercial and financial 10 12
 Total domestic 64 36
 International 3 12
 Total net credit losses $67 $48
 Annualized net credit
 losses to average loans 1.43 pct. 1.03 pct.
 The corporation recorded a $60 million provision for credit losses in the first quarter of l992, compared with a $45 million provision in the same period a year ago. Domestic net credit losses increased by $28 million compared with the first quarter of 1991, primarily reflecting the continued weakness in domestic commercial real estate markets. The $6 million increase in consumer net credit losses was largely attributable to the credit card portfolio acquisitions in 1991. International net credit losses in the first quarter of l992 were recorded in the commercial and industrial portfolio, while international net credit losses of $l2 million in the prior-year period resulted principally from loan sales as part of management's actions to virtually eliminate the corporation's exposure to lesser developed countries.
 Service Fee and Other Revenue
 (in millions)
 Quarter ended
 March 31,
 1992 1991
 Trust and investment
 management fees (A) $ 71 $ 63
 Cash management fees and
 deposit transaction charges 40 36
 Information services fees (A) 34 33
 Credit card revenue 12 9
 Mortgage servicing fees 8 7
 Other service fee revenue 33 34
 Total service fee revenue 198 182
 Trading revenue 4 2
 Gains on sale of
 investment securities 45 1
 Other noninterest revenue (2) 4
 Total service fee
 and other revenue $245 $189
 (A) Fees generated by the corporation's stock transfer and trust accounting services businesses, which were previously classified as "trust and investment management fees", have been combined with data processing fees and reported as "Information services fees". Accordingly, such fees totaling $9 million have been reclassified in the first quarter of 1991. On a restated basis, trust and investment management fees for the full year 1991 and 1990 were $269 million and $240 million, respectively, and information services fees for the full year 1991 and 1990 were $131 million and $136 million, respectively.
 The corporation continued to benefit from its fee generating businesses in the first quarter of l992 as service fee revenue increased by $16 million, or 8 percent, compared with the first quarter of l99l. Principally responsible for this improvement were increases of 14 percent in trust and investment management fees, 12 percent in cash management fees, and 34 percent in credit card revenues. The increase in credit card revenue was attributable in large part to the higher level of credit card receivables in 1992. Other service fee revenue included revenue from a seasonal product, which will be lower in the remaining quarters of 1992. Total revenue generated by this seasonal product, including loan fees reported in net interest revenue, was unchanged from the prior-year period.
 Payment for certain service products is made through the interest-earning capacity of customers' deposit balances rather than through fees. On an analytical basis, management views the fee-equivalent revenue from these deposit balances as service revenue, although it is reported in net interest revenue. This fee equivalent revenue was approximately $28 million in the first quarter of both 1992 and 1991. Including these amounts, service revenue was approximately 47 percent of the corporation's net interest and service revenue in the first quarter of 1992 and approximately 50 percent in the first quarter of 1991. The net interest revenue on these deposit balances contributed approximately 42 basis points to the net interest margin in the first quarter of 1992 and approximately 43 basis points in the first quarter of 1991.
 Trading revenue improved by $2 million in the first quarter of 1992, compared with the prior-year period, as a result of higher foreign exchange gains and bond trading profits.
 The corporation recorded $45 million in gains on the sale of investment securities during the first quarter of 1992, resulting principally from the sale of U.S. agency mortgage-backed securities. These sales were undertaken to help further reduce the corporation's exposure to prepayment risk in a low interest rate environment. Other noninterest revenue in the first quarter of 1992 included a $2 million loss, primarily from the sale of mortgages, compared with $4 million in gains recorded in the prior-year period on the sale of assets and lease residuals.
 Operating Expense
 (dollar amounts in millions)
 Quarter ended
 March 31,
 1992 1991
 Staff expense $142 $136
 Net occupancy expense 36 33
 Professional, legal and other
 purchased services 25 25
 Equipment expense 25 24
 Amortization of goodwill,
 intangibles and issue costs 16 13
 FDIC assessment and regulatory
 examination fees 13 11
 Shares, capital and
 franchise taxes 6 5
 Other expense 58 50
 Operating expense before the
 net expense of
 real estate acquired 321 297
 Net expense of real
 estate acquired 46 7
 Total operating expense $367 $304
 Average full-time
 equivalent staff 17,300 16,300
 Operating expense before the net expense of real estate acquired (OREO) increased by $24 million, or 8 percent, in the first quarter of 1992, compared with the first quarter of 1991. More than half of this increase resulted from the corporation's year-end 1991 acquisition of United Penn Bank (UPB) as well as from new business ventures and other asset acquisitions, including the purchase of two credit card portfolios in May 1991. The combined effect of these acquisitions contributed to higher expenses in nearly all expense categories and was primarily responsible for the increases in staff expense and the amortization of goodwill and other intangibles. The increase in average full-time equivalent staff level, compared with the prior-year quarter was due primarily to the addition of the employees of UPB, as well as a higher level of temporary employees to support revenue increases in the corporation's service businesses. The remaining increase in operating expense, before the net expense of OREO, reflected increases in a variety of expense categories, none of which was individually significant. The $39 million increase in the net expense of OREO resulted from an increased provision to the OREO reserve in response to a higher level of OREO in a declining market value environment in 1992.
 Income Taxes
 The provision for income taxes totaled $12 million in the first quarter of 1992, compared with $7 million in the first quarter of 199l. At March 31, 1992, approximately $105 million of unrecognized tax benefits are available to offset federal income taxes, depending upon several factors, including profits earned in future periods. The corporation will adopt Financial Accounting Standard (FAS) No. 109, "Accounting for Income Taxes," in the first quarter of 1993.
 CREDIT QUALITY
 (dollar amounts in millions)
 Reserve for Credit Losses
 March 31, Dec. 31, March 31,
 1992 1991 1991
 Reserve for
 credit losses $589 $596 $523
 Reserve as a percentage
 of total loans 3.20 pct. 3.12 pct. 2.78 pct.
 The reserve for credit losses decreased by $7 million during the first quarter of 1992, while the reserve as a percentage of total loans increased to 3.20 percent at March 31, 1992, from 3.12 percent at year-end 1991. Compared with March 3l, l99l, the $66 million increase in the reserve level primarily reflected $49 million of reserves attributable to the UPB and credit card portfolio acquisitions, as well as concerns over the effect of the sluggish economy on the credit quality of the loan portfolio. The reserve as a percentage of nonperforming loans rose to 125 percent at March 31, 1992, from 113 percent at Dec. 3l, 1991, and 104 percent at March 31, 199l. Management believes that the current reserve level is adequate to absorb future losses inherent in the loan portfolio, although the ultimate adequacy of the reserve is dependent upon future economic factors beyond the corporation's control.
 Nonperforming and Past Due Assets
 (dollar amounts in millions)
 March 31, Dec. 31, March 31,
 1992 1991 1991
 Domestic nonperforming loans:
 Real estate $328 $366 $380
 Other domestic 86 130 118
 International
 nonperforming loans 57 32 7
 Total nonperforming
 loans 471 528 505
 Assets acquired:
 Real estate acquired
 through foreclosures 219 245 195
 In-substance real
 estate foreclosures 181 140 135
 Reserve for real
 estate acquired (42) (21) (16)
 Real estate acquired,
 net of reserves 358 364 314
 Other assets acquired 39 41 2
 Total assets acquired 397 405 316
 Total nonperforming
 assets $868 $933 $821
 Nonperforming loans as a
 percentage of total loans 2.56 pct. 2.77 pct. 2.69 pct.
 Total nonperforming assets as a
 percentage of total loans and net
 assets acquired 4.61 pct. 4.78 pct. 4.30 pct.
 Past due loans $72 $75 $63
 Nonperforming assets at March 31, 1992, decreased by $65 million, or 7 percent, compared with Dec. 31, 1991. Domestic nonperforming real estate assets, which include domestic nonperforming real estate loans and real estate acquired (OREO) net of the reserve, decreased by $44 million during the quarter, primarily as a result of charge-offs and a $21 million increase in the reserve for OREO. The decrease in other domestic nonperforming loans resulted primarily from the sale of $44 million in loans made to one of the nation's largest natural gas systems. The $25 million increase in international nonperforming loans, compared with year-end 1991, resulted from the addition to nonaccrual status of a Canadian loan secured by real estate.
 Compared with March 31, 1991, nonperforming assets increased by $47 million, or 6 percent, due primarily to higher international nonperforming loans. Nonperforming domestic real estate assets decreased by $8 million compared with a year ago, despite the year-end 1991 addition of $23 million in nonperforming real estate assets from UPB. Other domestic nonperforming loans were down by $32 million, despite the addition of $14 million in UPB loans, primarily as a result of the first quarter 1992 loan sale discussed in the previous paragraph. The $50 million increase in international nonperforming loans compared with March 31, 1991, reflected the addition to nonaccrual status of Canadian loans secured by real estate and a loan to a borrower in the communications industry. The $37 million increase in other assets acquired resulted principally from in-substance foreclosures on three domestic commercial borrowers.
 Selected Capital Data
 (dollars in thousands)
 March 31, Dec. 31, March 31,
 1992 1991 1991
 Common shareholders'
 equity $1,727 $1,648 $1,336
 Total shareholders'
 equity 2,249 2,073 1,716
 Common shareholders'
 equity to assets
 ratio 5.91 pct. 5.61 pct. 4.65 pct.
 Total shareholders'
 equity to assets
 ratio 7.69 pct. 7.06 pct. 5.98 pct.
 Tier I capital
 ratio (A) 6.65 pct.(B) 5.66 pct. 4.47 pct.
 Total (Tier I and Tier II)
 capital ratio (A) 10.75 pct. (B) 9.86 pct. 8.27 pct.
 Leverage capital
 ratio (A) 5.70 pct. (B) 5.42 pct. 4.22 pct.
 Book value per
 common share (c) $32.32 $ 31.29 $29.39
 Closing common
 stock price $39.00 $34.875 $26.25
 Note: Ratios are based on unrounded numbers.
 (a) Calculated under the regulations applicable to year-end 1992.
 (b) Estimated.
 (c) The book value per common share assumes full conversion of the Series D preferred stock to common stock. Accordingly, this includes the additional paid-in capital on the Series D preferred stock because this paid-in capital has no liquidation preference over the common stock.
 Common shareholders' equity increased to 5.91 percent of total assets at March 31, 1992, from 5.61 percent at Dec. 31, 1991, primarily as a result of earnings retention. The corporation's overall capital position was additionally strengthened by the Jan. 21, 1992 issuance of four million shares of Series J preferred stock, which generated net proceeds of $97 million. The Series J preferred stock has an annual fixed dividend rate of 8.50 percent, a $25 per share liquidation value, and qualifies as Tier I capital.
 SUMMARY DATA

 Mellon Bank Corporation (and its subsidiaries)
 (dollar amounts in millions, except per share amounts)
 (common shares in thousands)
 Quarter ended
 3/31/92 12/31/91 9/30/91 6/30/92 3/31/91
 Selected statistical
 data (A)
 Return on
 assets 1.12 pct. .99 pct. .96 pct. .95 pct. .94 pct.
 Return on
 common shareholders'
 equity 17.62 pct. 4.87 pct. 14.74 pct. 16.47 pct. 17.54 pct.
 Yield on
 interest-earning
 assets, on a taxable
 equivalent
 basis 8.10 pct. 8.68 pct. 8.98 pct. 9.17 pct. 9.73 pct.
 Cost of funds
 supporting
 interest-earning
 assets 3.88 pct. 4.57 pct. 5.03 pct. 5.37 pct. 5.89 pct.
 Dividends per
 common
 share $.35 $.35 $.35 $.35 $.35
 Average balances
 for the period (B)
 Money market
 invest-
 ments $1,704 $1,456 $1,255 $1,401 $1,262
 Trading
 acct.
 securities 380 283 219 443 293
 Investment
 securities 5,991 5,268 5,399 5,501 5,162
 Loans 18,847 18,336 18,227 18,502 18,983
 Total
 interest-
 earning
 assets 26,922 25,343 25,100 25,847 25,700
 Total
 assets 30,660 28,737 28,642 29,473 29,360
 Deposits 22,592 20,830 21,117 21,691 21,911
 Total
 interest-
 bearing
 liabil-
 ities 22,596 21,661 21,565 22,597 22,566
 Common
 shareholders'
 equity 1,687 1,619 1,555 1,423 1,316
 Total
 shareholders'
 equity 2,186 2,093 2,018 1,802 1,695
 Quarter ended
 March 31,
 Computation of net
 income per common share 1992 1991
 Net income applicable to
 common stock (C) $ 74 $ 57
 Average common
 shares outstanding 51,522 43,989
 Average common shares issuable upon
 conversion of Series D
 preferred stock 1,523 1,443
 Other common stock
 equivalents, net of
 shares assumed repurchased 1,355 121
 Total stock and
 stock equivalents 54,400 45,553
 Net income per
 common share (D) $ 1.36 $ 1.25 ---------------
 (A) Percentages are annualized and based on unrounded numbers.
 (B) Computed on a daily average basis.
 (C) After adding back Series D preferred stock dividends of $1 million in both periods presented.
 (D) Based on unrounded numbers.
 CONDENSED CONSOLIDATED INCOME STATEMENT
 Mellon Bank Corporation (and its subsidiaries)
 (in millions, except per share amounts)
 Quarter ended
 March 31,
 1992 1991
 Interest revenue
 Loans and loan fees $395 $465
 Money market investments 18 23
 Trading account securities 7 6
 Investment est expense
 Deposits in domestic offices 180 262
 Deposits in foreign offices 14 23
 Short-term borrowings 40 56
 Notes and debentures (with
 original maturities over one year) 25 32
 Total interest expense 259 373
 Net interest revenue 280 235
 Provision for credit losses 60 45
 Net interest revenue after
 provision for credit losses 220 190
 Service fee and other revenue
 Service fee revenue 198 182
 Trading revenue 4 2
 Gains on sale of investment
 securities 45 1
 Other noninterest
 revenue (2) 4
 Total service fee and other
 revenue 245 189
 Operating expense
 Staff expense 142 136
 Net occupancy
 expense 36 33
 Professional, legal and
 other purchased services 25 25
 Equipment expense 25 24
 Amortization of goodwill,
 intangibles and issue costs 16 13
 FDIC assessment and
 regulatory examination fees 13 11
 Shares, capital and franchise
 taxes 6 5
 Other expense 58 50
 Net expense of real
 estate acquired 46 7
 Total operating expense 367 304
 Income before income
 taxes 98 75
 Provision for income
 taxes 12 7
 Net income 86 68
 Dividends on preferred
 stock 13 12
 Net income applicable
 to common stock $ 73 $ 56
 Net income per common
 share $1.36 $1.25
 CONDENSED CONSOLIDATED BALANCE SHEET
 Mellon Bank Corporation (and its subsidiaries)
 (dollar amounts in millions)
 March 31, Dec. 31, March 31,
 1992 1991 1991
 Assets
 Cash and due
 from banks $ 1,614 $ 1,635 $ 1,525
 Money market
 investments 1,131 1,183 986
 Trading account
 securities 57 85 23
 Investment securities
 (approximate market
 value of $6,415,
 $6,016 and $5,518) 6,355 5,744 5,457
 Loans, net of unearned
 discount of $99,
 $101 and $71 18,404 19,103 18,802
 Reserve for credit
 losses (589) (596) (523)
 Net loans 17,815 18,507 18,279
 Premises and equipment 445 440 432
 Real estate acquired,
 net of reserves of
 $42, $21 and $16 358 364 314
 Goodwill 219 220 231
 Other intangibles 327 331 263
 Other assets 931 846 1,197
 Total assets $29,252 $29,355 $28,707
 Liabilities
 Deposits in domestic
 offices $21,395 $21,471 $20,828
 Deposits in foreign
 offices 772 983 1,059
 Short-term borrowings 2,931 2,730 3,029
 Other liabilities 616 597 665
 Notes and debentures
 (with original maturities
 over one year) 1,289 1,501 1,316
 Total liabilities 27,003 27,282 26,897
 Redeemable preferred
 stock -- -- 94
 Shareholders' equity
 Preferred stock 522 425 380
 Common stock - $.50 par value
 Authorized - 120,000,000 shares
 Issued - 52,143,122; 51,401,066;
 and 44,557,275 shares 26 26 22
 Additional paid-in capital 1,243 1,217 1,034
 Retained earnings 454 401 277
 Warrants 10 11 15
 Treasury stock - 219,884;
 256,021; and 540,513
 shares at cost (6) (7) (12)
 Total shareholders'
 equity 2,249 2,073 1,716
 Total liabilities,
 redeemable preferred
 stock and shareholders'
 equity $29,252 $29,355 $28,707
 -0- 4/21/92
 /CONTACT: Charles M. Johnston, analysts, 412-234-5601, or Thomas W. Butch, media, 412-234-6436, both of Mellon Bank Corporation/
 (MEL) CO: Mellon Bank Corporation ST: Pennsylvania IN: FIN SU: ERN


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