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NATWEST BANCORP REPORTS RECORD PROFITS SIXTH CONSECUTIVE QUARTER OF INCREASED EARNINGS

 JERSEY CITY, N.J., July 15 /PRNewswire/ -- National Westminster Bancorp (NatWest Bancorp) today reported record net income of $69.8 million for the second quarter of 1993, compared with $35.6 million in the second quarter of 1992. For the six months ended June 30, 1993, net income was $130.5 million compared with net income of $65.8 million for the corresponding 1992 period. The 1993 results include the recognition of previously unrecorded Federal tax benefits, to be utilized by future earnings, of $14.5 million and $24.0 million in the quarter and year-to- date periods, respectively.
 "The strengthening of our core businesses is providing a momentum that we expect to continue," said John Tugwell, chairman and chief executive. "Long term, revenues must fuel growth and we are investing in product development and new businesses to achieve this. We are focusing on those earnings streams that will lessen our dependence on interest income."
 Return on average equity for the quarter and six months ended June 30, 1993, was 14.39 percent and 13.72 percent, respectively, compared with 8.17 percent and 7.61 percent in the 1992 periods. NatWest Bancorp's net income before goodwill amortization totaled $79.0 million for the quarter and $149.0 million for the first half of 1993 compared with $44.9 million for the quarter and $84.3 million for the first half of 1992. This represents a return on average tangible equity of 23.11 percent for the quarter and 22.44 percent for the six months ended June 30, 1993, compared with 15.78 percent and 15.08 percent in the corresponding 1992 periods.
 NatWest Bancorp's allowance for loan losses was $544.5 million, or 3.85 percent of total loans outstanding at June 30, 1993, compared with $657.5 million, or 4.63 percent at June 30, 1992. Provisions for loan losses were $24.0 million and $54.0 million for the second quarter and six months ended June 30, 1993, respectively, down from $30.5 million and $61.0 million in the comparable 1992 periods. Net charge-offs totaled $91.6 million in the second quarter and $119.5 million for the six months ended June 30, 1993, compared with $31.3 million and $93.0 million, respectively, in the corresponding 1992 periods. While this is a significant increase, it relates primarily to losses recognized on the sale of several large problem credits, for which provisions had previously been established. This, in turn, resulted in considerable asset quality improvement.
 Non-accrual loans totaled $790.7 million at June 30, 1993, down from $1,126.1 million at June 30, 1992. Non-accrual loans amounted to 5.59 percent of total loans at June 30, 1993, down from 7.92 percent at June 30, 1992. These balances have been reduced through debt restructurings and loan repayments as well as the aforementioned loan sales. Foreclosed assets (including other real estate owned) totaled $310.3 million at June 30, 1993, down from $331.3 million at June 30, 1992.
 Net interest income for the second quarter of 1993 was $196.6 million, compared with $186.5 million in the second quarter of 1992. For the six months ended June 30, 1993, net interest income was $388.8 million, compared with $363.3 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 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 3.89 percent in the second quarter and 3.93 percent for the first six months of 1993 compared with 3.83 percent and 3.76 percent in the corresponding 1992 periods.
 Non-interest income totaled $90.1 million for the second quarter of 1993, an increase of $12.9 million from the 1992 period. For the first half of 1993, non-interest income was $186.6 million, up from $155.7 million in 1992. These amounts included gains on the sale of securities of $11.0 million and $10.9 million for the second quarter of 1993 and 1992, respectively, and $21.9 million and $20.5 million for the six months ended June 30, 1993 and 1992, respectively.
 Non-interest income benefited from the successful introduction of new products and enhancements to existing products which further diversified income streams. The improvement came from growth in deposit and loan-related fees, as well as expanded income from trading and capital market activities. The results also included a gain of $8.7 million recognized in the first quarter of 1993 on the sale of stock received in connection with a loan restructuring completed in a prior period.
 Operating expenses were $202.4 million in the second quarter of 1993, compared with $196.0 million reported in the second quarter of 1992, an increase of 3 percent. For the six months ended June 30, 1993, operating expenses were $404.4 million, compared with $387.6 million in the 1992 period. The increase of 4 percent resulted primarily from the efforts to expand the revenue base by diversifying income streams. It included the funding of a more comprehensive 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, as the size of the workforce declined 2 percent from the level one year ago.
 The income tax benefit was $9.5 million in the second quarter of 1993, compared with a provision of $1.5 million in the second quarter of 1992. For the six months ended June 30, 1993, the benefit was $13.4 million, compared with a provision of $4.7 million in the comparable 1992 period. The utilization of prior period tax losses resulted in no Federal income tax provision for the six month periods ended June 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 $24 million 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 June 30, 1993, was $1,982 million. Risk-based capital ratios were strong, with a Tier 1 ratio of 8.13 percent and a total capital ratio of 12.74 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 (NYSE: NW), 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 June 30 1993 1992
 Net interest income $196,557 $186,467
 Provision for loan losses 24,000 30,500
 Non-interest income 90,136 77,189
 Operating expenses 202,381 196,007
 Net income 69,796 35,640
 Net interest margin (percent) 3.89 3.83
 Return on average equity (percent) 14.39 8.17
 Return on avg. tangible equity (percent) 23.11 15.78
 Return on average assets (percent) 1.23 .66
 For the Six Months Ended June 30 1993 1992
 Net interest income $388,820 $363,334
 Provision for loan losses 54,000 61,000
 Non-interest income 186,627 155,736
 Operating expenses 404,406 387,553
 Net income 130,483 65,788
 Net interest margin (percent) 3.93 3.76
 Return on average equity (percent) 13.72 7.61
 Return on avg. tangible equity (percent) 22.44 15.08
 Return on average assets (percent) 1.18 .61
 At June 30 1993 1992
 Total assets $23,040,948 $22,191,581
 Total loans 14,146,218 14,211,391
 Total core deposits 13,246,391 13,435,090
 Total equity capital 1,981,753 1,761,901
 Allowance for loan losses as a
 percentage of total loans (percent) 3.85 4.63
 Non-accrual loans as a percentage
 of total loans (percent) 5.59 7.92
 Capital ratios:
 Risk-based capital ratios:
 Tier 1 (percent) 8.13 6.65
 Total (percent) 12.74 11.25
 Leverage ratio (percent) 6.35 5.41
 -0- 7/15/93
 /CONTACT: Chris Cameris, 212-602-2505, or Tim Connolly, 201-547-7533, both of National Westminster Bancorp/
 /FIRST ADD -- TABULAR MATERIAL -- TO FOLLOW/
 (NW)


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

PS -- NY009 -- 1826 07/15/93 09:51 EDT
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Date:Jul 15, 1993
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