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NATWEST BANCORP REPORTS RECORD PROFITS; SEVENTH CONSECUTIVE QUARTER OF INCREASED EARNINGS

 JERSEY CITY, N.J., Oct. 14 /PRNewswire/ -- National Westminster Bancorp (NatWest Bancorp) today reported record net income of $71.5 million for the third quarter of 1993, compared with $39.3 million in the third quarter of 1992, up 82 percent. For the nine months ended Sept. 30, 1993, net income was $202.0 million compared with net income of $105.1 million for the corresponding 1992 period, an increase of 92 percent. The 1993 results include the recognition of previously unrecorded federal tax benefits, to be utilized by future earnings, of $17 million and $41 million in the quarter and year-to-date periods, respectively.
 As previously announced, during the third quarter NatWest Bancorp completed a sale of real estate loans and foreclosed assets with an original contractual value of approximately $150.0 million. This transaction gave rise to $10.7 million in loan charge-offs and $25.8 million in foreclosed asset expenses.
 "We are truly delighted by another quarter of record performance," said John Tugwell, chairman and chief executive, referring to the organization's seventh consecutive quarter of increased earnings. "The major steps we took to improve asset quality through the sale of real estate assets along with the individual sale of several other problem credits have substantially strengthened our financial base for future periods."
 There were reductions during the third quarter of $72.8 million in non-accrual loans to $717.9 million at Sept. 30, 1993, and $158.5 million in foreclosed assets to $151.8 million at Sept. 30, 1993. Combined, non-accrual loans and foreclosed assets have declined $546.7 million (39 percent) from the level of a year ago. Non-accrual loans amounted to 5.22 percent of total loans at Sept. 30, 1993, down from 8.00 percent at Sept. 30, 1992.
 A consequence of the asset sales was an increase in net charge-offs to $81.9 million in the third quarter and $201.3 million for the nine months ended Sept. 30, 1993, from $48.3 million and $141.4 million, respectively, in the corresponding 1992 periods. Reserves had been established in earlier periods in anticipation of these charge-offs.
 NatWest Bancorp's allowance for loan losses was $482.6 million, or 3.51 percent of total loans outstanding at Sept. 30, 1993, compared with $639.7 million, or 4.54 percent at Sept. 30, 1992. Provisions for loan losses were $20.0 million and $74.0 million for the third quarter and nine months ended Sept. 30, 1993, respectively, down from $30.5 million and $91.5 million in the comparable 1992 periods.
 Return on average equity for the quarter and nine months ended Sept. 30, 1993, was 14.09 percent and 13.85 percent, respectively, compared with 8.72 percent and 7.99 percent in the 1992 periods. Before goodwill amortization, return on average tangible equity was 22.12 percent for the quarter and 22.33 percent for the nine months ended Sept. 30, 1993, compared with 16.20 percent and 15.47 percent in the corresponding 1992 periods.
 Net interest income for the third quarter of 1993 was $201.9 million, compared with $183.6 million in the third quarter of 1992. For the nine months ended Sept. 30, 1993, net interest income was $590.7 million, compared with $546.9 million in 1992. A reduction in the amount of interest lost on non-accrual loans and foreclosed assets (net of interest income recognized) and a substantially higher volume of average demand deposits, which replaced more costly sources of funds, were the major contributors to this increase. As a result of this, net interest income on a tax-equivalent basis as a percentage of average interest earning assets (net interest margin) increased to 3.84 percent in the third quarter and 3.89 percent for the first nine months of 1993 compared with 3.71 percent and 3.75 percent in the corresponding 1992 periods.
 Non-interest income totaled $115.9 million for the third quarter of 1993, an increase of $29.5 million from the 1992 period. For the first nine months of 1993, non-interest income was $302.6 million, up from $242.1 million in 1992. These amounts included gains on the sale of securities of $27.9 million and $11.5 million for the third quarter of 1993 and 1992, respectively, and $49.8 million and $31.9 million for the nine months ended Sept. 30, 1993 and 1992, respectively.
 Excluding the impact of securities gains, non-interest income rose $13.1 million, and $42.6 million in the quarter and year-to-date periods, respectively, as investments in product development and new business initiatives have begun to contribute to revenue streams. The improvement came from growth in trading and capital market activities, as well as expanded income from deposit and loan-related fees.
 Operating expenses were $235.5 million in the third quarter of 1993, compared with $197.4 million reported in the third quarter of 1992. For the nine months ended Sept. 30, 1993, operating expenses were $639.9 million, compared with $585.0 million in the 1992 period. Foreclosed assets costs increased $21.1 million and $17.3 million for the quarter and year-to-date periods, respectively, as the result of the aforementioned asset sales.
 Excluding these costs, operating expenses increased 9 percent in the quarter and 7 percent in the year-to-date period reflecting the increased spending on successful efforts to expand the revenue base by diversifying income streams. The rise included the funding of a more comprehensive performance based incentive compensation program, costs associated with the development and introduction of new products and the expansion of the consumer banking infrastructure. Also contributing to the increase were higher FDIC costs due to higher premium rates charged, and higher health insurance costs associated with the adoption of a new accounting standard requiring the accelerated recognition of post-retirement benefits. Partially mitigating these increases were the continuing benefits gained from the consolidation of operations and staff functions.
 The income tax benefit was $9.3 million in the third quarter of 1993, compared with a provision of $2.7 million in the third quarter of 1992. For the nine months ended Sept. 30, 1993, the benefit was $22.7 million, compared with a provision of $7.4 million in the comparable 1992 period. The utilization of prior period tax loss carryforwards resulted in no federal income tax provision for the nine-month periods ended Sept. 30, 1993 and 1992.
 On Jan. 1, 1993, NatWest Bancorp adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109), retroactive to Jan. 1, 1991. Adoption resulted in a restatement of the 1991 net loss, which increased by $8.0 million due to the recalculation of deferred tax assets using current tax rates. The effect on 1992 was minimal. Furthermore, in connection with the adoption of SFAS 109, NatWest Bancorp reduced the income tax provision by $17.0 million in the third quarter and $41.0 million year to date in 1993 by recognizing the future tax benefits associated with net operating loss carryforwards that are likely to be realized in the short-term.
 Equity capital at Sept. 30, 1993, was $2,053.3 million. Risk-based capital ratios were strong, with a Tier I ratio of 8.72 percent and a total capital ratio of 13.43 percent.
 NatWest Bancorp, the holding company for New York based National Westminster Bank USA and New Jersey based National Westminster Bank NJ, is a wholly-owned subsidiary of National Westminster Bank Plc, the London-based international banking and financial services organization.
 NATIONAL WESTMINSTER BANCORP INC. AND SUBSIDIARIES
 Financial Highlights (Dollar Amounts in Thousands)
 For the Quarter Ended Sept. 30 1993 1992
 Net Interest Income $201,862 $183,614
 Provision for Loan Losses 20,000 30,500
 Non-Interest Income 115,923 86,384
 Operating Expenses 235,528 197,445
 Net Income 71,524 39,333
 Net Interest Margin (pct) 3.84 3.71
 Return on Average Equity (pct) 14.09 8.72
 Return on Average Tangible Equity (pct) 22.12 16.20
 Return on Average Assets (pct) 1.22 .71
 For the Nine Months Ended Sept. 30 1993 1992
 Net Interest Income $590,682 $546,948
 Provision for Loan Losses 74,000 91,500
 Non-Interest Income 302,550 242,120
 Operating Expenses 639,934 584,998
 Net Income 202,007 105,121
 Net Interest Margin (pct) 3.89 3.75
 Return on Average Equity (pct) 13.85 7.99
 Return on Average Tangible Equity (pct) 22.33 15.47
 Return on Average Assets (pct) 1.19 .64
 At Sept. 30 1993 1992
 Total Assets $24,430,961 $22,306,850
 Total Loans 13,743,679 14,097,296
 Total Core Deposits 13,120,310 13,494,679
 Total Equity Capital 2,053,277 1,801,233
 Allowance for Loan Losses as
 a Percentage of Total Loans 3.51 4.54
 Non-Accrual Loans as a
 Percentage of Total Loans 5.22 8.00
 Capital Ratios (pct):
 Risk-Based Capital Ratios:
 Tier 1 8.72 6.99
 Total 13.43 11.76
 Leverage Ratio 6.53 5.62
 -0- 10/14/93
 /CONTACT: Chris Cameris, 212-602-2505, or Tim Connolly, 201-547-7533, both of NatWest Bancorp/
 (NW)


CO: National Westminster Bancorp ST: New Jersey IN: FIN SU: ERN

SH-DH -- NY007 -- 2121 10/14/93 10:39 EDT
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Date:Oct 14, 1993
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