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NEW JERSEY BANKERS PLEASED WITH SECOND QUARTER RESULTS

 NEW JERSEY BANKERS PLEASED WITH SECOND QUARTER RESULTS
 PRINCETON, N.J., Sept. 11 /PRNewswire/ -- The chairman of the New Jersey Bankers Association (NJBA) today voiced his organization's satisfaction with the Federal Deposit Insurance Corporation's (FDIC) announcement that commercial banks in the Garden State earned $126 million during the second quarter ended June 30, while increasing equity capital 15.4 percent during the past 12 months.
 "This announcement reflects a continued positive trend in bank earnings, which began in the third quarter of last year," said Robert G. Cox, NJBA chairman, and president, Summit Trust Company, Summit, N.J. "The income and capital figures support our belief that New Jersey's banks are holding their own during the present recession, and are in a good position to support economic growth in our state, where appropriate."
 According to the FDIC, total New Jersey commercial bank income during the first six months of 1992 reached $222 million, as opposed to a $319 million loss during the same period in 1991.
 "Obviously, our banks have made extraordinary gains in reversing an earnings decline which began in mid-1990," commented Cox. "These gains here at home, combined with the fact that nationally, banks earned more than $14 billion, strongly support the position that commercial banks are not headed for a repeat of the savings and loan bailout that has been ongoing and expensive for everyone."
 The state's equity capital rise, to $5.9 billion, is significant as it signals increased confidence by the investment community in the ability of banks to generate reasonable returns for their shareholders, he added.
 Other figures in the FDIC release indicate that New Jersey commercial bank assets increased 2.2 percent during the 12-month period to $94 billion, and deposits rose 2.8 percent to $80 billion.
 Real estate loans at New Jersey banks increased by some $525 million from a year prior, to a total of $32.3 billion, despite a 5.2 percent decline in total loans to $53 billion.
 "This increase in real estate borrowings demonstrates commercial banking's willingness to finance housing and real estate ventures in New Jersey," said Cox. "Although loan demand is weak at present, banks are willing to provide funds to credit-worthy borrowers for sound projects. Banks want to make loans -- that's how they make money!"
 "Let there be no doubt that lending standards were relaxed during the 1980s," he added. "But our return to the basics of banking using sound lending practices has clearly contributed to the improved financial footing of the industry."
 As for the remainder of the year, Cox said he expects continued, moderate improvement, though the longer term outlook will depend largely on events which have yet to materialize in Washington.
 "The weight of bank regulation is absolutely strangling this industry, and has only gotten worse as a result of the savings and loan debacle," he said. "It's not that we're against regulation, it's that we're against over-regulation."
 "Nationally, banks spent $10.7 billion last year, or 59 percent of industry profits, complying with banking regulations," said Cox. "If 25 percent of that cost could be applied to bank capital, the industry could support between $20 billion and $30 billion in additional loans nationwide."
 -0- 9/11/92
 /delval/
 /CONTACT: Kurt E. Schaub, director of communications of New Jersey Bankers Association, 609-924-5550/ CO: New Jersey Bankers Association ST: New Jersey IN: FIN SU: ERN


MK-LJ -- PH009 -- 8407 09/11/92 10:44 EDT
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Publication:PR Newswire
Date:Sep 11, 1992
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