Printer Friendly

MICHIGAN NATIONAL CORPORATION ANNOUNCES HIGHER EARNINGS FOR FIRST NINE MONTHS OF 1992; LOWER EARNINGS FOR THIRD QUARTER

 MICHIGAN NATIONAL CORPORATION ANNOUNCES HIGHER EARNINGS
 FOR FIRST NINE MONTHS OF 1992; LOWER EARNINGS FOR THIRD QUARTER
 FARMINGTON HILLS, Mich., Oct. 22 /PRNewswire/ -- Michigan National Corporation (NASDAQ-NMS: MNCO) today announced earnings for the third quarter 1992 of $11.5 million, or $0.76 per share. Net income for the third quarter last year was $18.3 million, or $1.23 per share. Net income for the nine months ended Sept. 30, 1992, was $54.2 million, or $3.60 per share, compared to $31.5 million, or $2.12 per share.
 Contributing to the increase in earnings for the first nine months of 1992 compared to last year was a 21-percent decrease in the provision for possible credit losses to $55.4 million in 1992 from $69.9 million in 1991. The corporation's credit quality ratios have improved during 1992. The allowance for possible loan losses was 2.56 percent of total loans at Sept. 30, 1992, up from 2.35 percent at Dec. 31, 1991, and 2.42 percent at Sept. 30, 1991. As a percentage of non-performing loans, the allowance was 109.3 percent at the end of the third quarter, also up from 82.8 percent at year-end 1991 and 91.0 percent at the end of the third quarter last year. Total non-performing assets (non-performing loans plus property from defaulted loans) have declined to $315.6 million at Sept. 30, 1992, from $329.2 million at Dec. 31, 1991, and $320.5 million at Sept. 30, 1991. In addition, performing watch credits decreased to $651 million at Sept. 30, 1992, from $694 million at the end of June 1992
 Robert J. Mylod, chairman and chief executive officer, said, "These improvements in credit quality are reassuring. In particular, we are pleased the allowance to non-performing loans ratio exceeds 100 percent (109.3 percent) and with the reduction in watch credits. Further reduction in non-performing assets continues to be a primary focus of management. Our continued success in this area could be hampered by further economic decline."
 The corporation previously announced that during the third quarter it adopted the new accounting standard for income taxes, Statement of Financial Accounting Standards No. 109 (SFAS No. 109). The adoption of the new accounting standard resulted in a reduction of the corporation's effective income tax rate to 10 percent, which compares to an effective rate of 19 percent last year. Prior to the adoption of SFAS No. 109, the corporation's estimated effective tax rate for 1992 was 26.4 percent. The decrease in effective tax rate from 26.4 percent to 10.0 percent resulted in a decrease of $8.7 million in income tax expense for the nine months ended Sept. 30, 1992. In addition, net income was increased by a one-time cumulative adjustment of $6.3 million.
 The decline in earnings for the third quarter 1992 compared to last year's third quarter, was due to an adjustment in the value of the corporation's mortgage servicing assets.
 During this year, and particularly in the third quarter, the mortgage banking industry has experienced an extraordinary increase in mortgage loan refinancings resulting in an accelerated rate of loan prepayments in servicing portfolios. In response, management increased the amortization expense on acquired servicing rights and capitalized excess servicing fees. The year-to-date amortization expense of $34.9 million compares to $15.4 million for the same period last year. The increased amortization expense together with a significant increase in expenses to process the unusually high volume of mortgage pay-offs were primary contributors to the increase in the corporation's total non-interest expense to $122.6 million in the third quarter and $347.6 million in the first nine months of 1992 from $106.5 million and $300.8 million, respectively, for the same periods last year.
 The prepayments in the servicing portfolio since Dec. 31, 1991, have been offset by new loan originations resulting in a net increase in loans serviced of approximately $400 million to $14.5 billion at Sept. 30, 1992.
 Mylod commented, "The refinancing activity has resulted in the replacement of older acquired servicing primarily with servicing originated by the mortgage company. Retained servicing from originated loans is 3 to 4 times less expensive to produce than purchased servicing, and, in the current interest rate environment, generates lower coupon servicing that is less likely to pay off early . Retained serving originated through Sept. 30, 1992 was $2.3
billion. Total originated servicing at Sept. 30, 1992, was approximately $3.6 billion, or 25 percent of total loans serviced, compared to approximately $2.0 billion, or 14 percent of total loans serviced, at Dec. 31, 1991."
 Mylod continued, "The corporation's core businesses are, on balance, growing nicely. Fee generating investment assets have grown $1.1 billion from their Dec. 31, 1991, level of $4.4 billion. Retail banking relationships, after a setback created by the sale of the credit card business, have again begun to grow and now exceed 300,000.
 Mortgage production through Sept. 30, 1992, was $3.7 billion including correspondent production, up sharply from $1.9 billion during the same period last year. The commercial banking market share has remained static over the last 3 years as the corporation moved to reduce its exposure to commercial real estate lending."
 The corporation's net interest income in 1992 has benefited from improved interest rate spreads and effective asset/liability management which includes the use of off-balance sheet hedging strategies. Net interest income for the three months ended Sept. 30, 1992, was $101.0 million compared to $95.3 million for the same period last year. For the nine months ended Sept. 30, 1992, net interest income was $298.2 million compared to $273.9 million last year. The net interest margin percentage was 4.62 percent for the third quarter 1992 and 4.52 percent for the first nine months compared to 4.46 percent and 4.36 percent, respectively, for the same periods last year.
 The corporation's total non-interest income was $52.9 million in the third quarter and $158.0 million for the first nine months of 1992. This compares to $48.5 million and $135.6 million, respectively, in the same periods last year.
 Michigan National corporation is a diversified financial services corporation with total assets of $10.7 billion. It is a bank holding company and a savings and loan holding company.
 Michigan National Corporation's principal subsidiary, Michigan National Bank, has approximately 190 branches throughout Michigan. Michigan National Corporation has its headquarters in Farmington Hills, Michigan.
 MICHIGAN NATIONAL CORPORATION AND SUBSIDIARIES
 CONSOLIDATED FINANCIAL HIGHLIGHTS
 (Unaudited)
 Three Months Ended
 Sept. 30, June 30, Sept. 30,
 1992 1992 1991
 Operating Results
 (in thousands)
 Interest income $190,379 $199,971 $225,494
 Interest expense 89,385 99,258 130,150
 Net interest income 100,994 100,713 95,344
 Provision for possible credit
 losses 18,571 18,418 15,000
 Non-interest income 52,859 51,462 48,469
 Non-interest expense 122,651 112,291 106,485
 Income before income tax expense 12,631 21,466 22,328
 Income tax provision(a) 1,078 2,247 4,000
 Net income(a) $11,553 $19,219 $18,328
 Per Common Share
 Net income-primary(a) $0.76 $1.28 $1.23
 Average shares outstanding 15,148 15,049 14,884
 Cash dividends declared $0.50 $0.50 $0.50
 Book value end-of-period(a) $53.51 $53.15 $50.74
 Market value end-of-period $44.00 $46.25 $33.75
 Market value: high $50.375 $51.00 $40.75
 Market value: low $43.50 $44.00 $25.25
 Selected Period-End Balances
 (in millions)
 Total assets $10,670 $10,635 $10,520
 Earning assets 9,507 9,633 9,481
 Total loans and lease financing 6,788 6,620 6,486
 Non-performing assets 316 326 321
 Deposits 8,699 8,639 8,460
 Long-term debt 83 93 89
 Shareholders' equity(a) 798 790 748
 Selected Average Balances
 (in millions)
 Total assets $10,443 $10,789 $10,459
 Earning assets 9,405 9,768 9,539
 Total loans and lease financing 6,560 6,786 6,533
 Deposits 8,687 8,852 8,512
 Long-term debt 88 94 91
 Shareholders' equity(a) 801 784 744
 Selected Financial Ratios Percent Percent Percent
 Return on average shareholders'
 equity(a) 5.77 9.80 9.86
 Return on average total assets(a) 0.44 0.71 0.70
 Average equity to average total
 assets(a) 7.67 7.27 7.11
 Allowance to period-end loans 2.56 2.50 2.42
 Non-performing assets to
 period-end loans plus property
 from defaulted loans 4.54 4.82 4.83
 Net interest spread 3.87 3.73 3.58
 Net interest margin 4.62 4.49 4.46
 Equity to asset ratio(a) 7.48 7.43 7.12
 Leverage ratio 7.31 7.01 7.04
 Tier 1 risk based capital ratio 9.57 9.80 9.54
 Total risk based capital ratio 11.79 12.08 11.77
 Dividend payout ratio(a) 65.79 39.06 40.65
 (a) -- Previously reported amounts for the quarter ended June 30, 1992, have been restated for the effects of a change in accounting principle.
 MICHIGAN NATIONAL CORPORATION AND SUBSIDIARIES
 CONSOLIDATED FINANCIAL HIGHLIGHTS
 (Unaudited)
 Nine Months Ended
 Sept. 30,
 1992 1991
 Operating Results
 (in thousands)
 Interest income $591,886 $689,914
 Interest expense 293,688 415,982
 Net interest income 298,198 273,932
 Provision for possible credit losses 55,353 69,944
 Non-interest income 157,967 135,632
 Non-interest expense 347,566 300,841
 Income before income tax expense 53,246 38,779
 Income tax provision(a) 5,330 7,290
 Income before cumulative effect of a change
 in accounting principle(a) 47,916 31,489
 Cumulative effect of a change in
 accounting principle(a) 6,265 ---
 Net income(a) $54,181 $31,489
 Per Common Share
 Net income-primary(a) $3.60 $2.12
 Average shares outstanding 15,064 14,831
 Cash dividends declared $1.50 $1.50
 Book value end-of-period(a) $53.51 $50.74
 Market value end-of-period $44.00 $33.75
 Market value: high $51.25 $40.25
 Market value: low $42.00 $14.75
 Selected Period-End Balances
 (in millions)
 Total assets $10,670 $10,520
 Earning assets 9,507 9,481
 Total loans and lease financing 6,788 6,486
 Non-performing assets 316 321
 Deposits 8,699 8,460
 Long-term debt 83 89
 Shareholders' equity(a) 798 748
 Selected Average Balances
 (in millions)
 Total assets $10,606 $10,583
 Earning assets 9,573 9,648
 Total loans and lease financing 6,687 6,616
 Deposits 8,738 8,655
 Long-term debt 91 95
 Shareholders' equity(a) 786 739
 Nine Months Ended
 Sept. 30,
 1992 1991
 Selected Financial Ratios Percent Percent
 Return on average shareholders' equity(a) 9.19 5.68
 Return on average total assets(a) 0.68 0.40
 Average equity to average assets(a) 7.41 6.99
 Allowance to period-end loans 2.56 2.42
 Non-performing assets to period-end loans plus
 property from defaulted loans 4.54 4.83
 Net interest spread 3.76 3.47
 Net interest margin 4.52 4.36
 Equity to asset ratio(a) 7.48 7.12
 Leverage ratio 7.31 7.04
 Tier 1 risk based capital ratio 9.57 9.54
 Total risk based capital ratio 11.79 11.77
 Dividend payout ratio(a) 41.67 70.75
 (a) -- Previously reported amounts for the six months ended June 30,
 1992, have been restated for the effects of a change in accounting
 principle.
 -0- 10/22/92
 /CONTACT: Ariadne Magoulias, 313-473-3428, or Vernon Patterson (Investor Relations), 313-473-3076, both of Michigan National Corporation/
 (MNCO) CO: Michigan National Corporation ST: Michigan IN: FIN SU: ERN


DH-KS -- DE001 -- 3285 10/22/92 08:10 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 22, 1992
Words:1959
Previous Article:CALLAWAY GOLF AGAIN REPORTS RECORD SALES AND EARNINGS; SALES AND EARNINGS MORE THAN DOUBLE FOR THIRD CONSECUTIVE QUARTER
Next Article:ALLIANT TECHSYSTEMS REPORTS SECOND QUARTER INCOME FROM CONTINUING OPERATIONS OF $10.2 MILLION
Topics:


Related Articles
CHEMICAL FINANCIAL CORPORATION ANNOUNCES 2ND-QUARTER OPERATING RESULTS
OLD KENT ANNOUNCES QUARTERLY EARNINGS ARE UP 27 PERCENT
CHEMICAL FINANCIAL CORPORATION ANNOUNCES 3rd-QUARTER OPERATING RESULTS
CHEMICAL FINANCIAL CORPORATION ANNOUNCES FIRST-QUARTER OPERATING RESULTS
MICHIGAN NATIONAL REPORTS THIRD QUARTER EARNINGS OF $29.2 MILLION; A SUBSTANTIAL INCREASE OVER LAST YEAR'S THIRD QUARTER
FIRSTFED MICHIGAN REPORTS 73 PERCENT INCREASE IN CORE EARNINGS
CHEMICAL FINANCIAL CORPORATION ANNOUNCES THIRD-QUARTER OPERATING RESULTS
HARLEYSVILLE NATIONAL CORPORATION POSTS PROFITS FOR THIRD QUARTER
OLD KENT THIRD-QUARTER EARNINGS UP 17 PERCENT
OLD KENT POSTS HIGHER THIRD QUARTER EARNINGS

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters