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SHAWMUT NATIONAL CORPORATION EXPECTED TO REPORT NET INCOME OF APPROXIMATELY $70 MILLION IN THE THIRD QUARTER

 HARTFORD, Conn., and BOSTON, September 23 /PRNewswire/ -- Shawmut National Corporation (NYSE: SNC) today announced that it expects to report 1993 third quarter net income of approximately $70 million, or about $.70 per common share, when results are reported in mid-October. These results compare to net income of $13.0 million, or $.14 per common share, in the third quarter of 1992 and $56.3 million, or $.56 per common share, in the second quarter of 1993.
 Joel B. Alvord, Shawmut's chairman and chief executive officer, commented, "We expect that Shawmut's third quarter results will continue the steady, favorable trends which have characterized Shawmut's performance for the last two years. We are pleased that Shawmut's earnings strength is becoming increasingly visible as expense savings and declining credit costs are allowing revenues to hit the bottom line."
 Preliminary results indicate that core earnings, which are earnings before credit costs, taxes and special items, should be approximately $100 million in the third quarter, up over 5 percent from $94.4 million in the second quarter of 1993. Securities gains are not expected to make a meaningful contribution to net income in the third quarter.
 The Corporation will experience a lower effective tax rate for the quarter, as compared with the prior quarter, due to the recent enactment of new tax legislation. The Corporation's net deferred tax asset, representing the tax benefits of future tax deductions, will increase from the new higher corporate tax rates resulting in a tax benefit of approximately $8 million for the quarter. In addition, the third quarter will include a tax benefit of approximately $5 million from the reduction of the deferred tax asset valuation allowance as compared with $4.8 million in the second quarter.
 Net interest income on a tax-equivalent basis is expected to increase to approximately $240 million in the third quarter, up from the $236.4 million reported in the second quarter of 1993. Net interest margin in the third quarter is expected to be between 4.05 and 4.10 percent, reflecting a possible modest decline from the 4.10 percent net interest margin reported in the second quarter. Net interest margin was adversely affected by the $1 billion third quarter increase in the securities portfolio at spreads below the average for earning assets in general.
 Noninterest income for the third quarter is expected to be approximately flat relative to the $90.9 million reported in 1993's second quarter.
 Shawmut expects that noninterest expenses (excluding provision for foreclosed properties) for the third quarter will decline by approximately $3 to $4 million from the $229.6 million reported in the second quarter. This improvement in the cost structure of the corporation is expected to result in an efficiency ratio (the ratio of noninterest expenses to total revenues) of 68 to 69 percent in the third quarter. The decline in noninterest expenses is attributable to a restructuring program which Shawmut announced in the first quarter of 1993. Continued declines in noninterest expenses are expected as further progress in implementing the restructuring program is achieved.
 Problem assets are expected to decline by approximately $50 million or approximately 10 percent in the third quarter from $513.1 million at June 30, 1993.
 Net charge-offs are expected to decline by $8 to $10 million from the $39.9 million reported, net of bulk sales, in the second quarter of 1993.
 Credit costs are also expected to remain low in the third quarter. Provisions for loan losses and for foreclosed properties are each expected to decline by approximately $2 million from the $7.0 million and $11.5 million, respectively, reported in the second quarter.
 Shawmut National has pending acquisitions with the New Dartmouth Bank of Manchester, N.H. and Peoples Bancorp of Worcester, Mass.
 Shawmut National had $25.8 billion in assets at June 30, 1993 and nearly 300 branches in Connecticut, Massachusetts and Rhode Island. Shawmut National is a leading provider of financial services to consumers and small- to medium-sized businesses in the region. It also provides financial services to corporate customers, correspondent banks, and governmental units in New England and select national markets.
 -0- 9/23/93
 /CONTACT: Brent S. Di Giorgio, news media contact, 203-240-7632, or Thomas R. Rice, investor contact, 203-728-4872, both of Shawmut National Corporation/
 (SNC)


CO: Shawmut National Corporation ST: Connecticut, Massachusetts IN: FIN SU: ERN

JL -- NE001 -- 5031 09/23/93 08:05 EDT
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Publication:PR Newswire
Date:Sep 23, 1993
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