SHAWMUT NATIONAL CORPORATION REPORTS SECOND QUARTER NET INCOME OF $56.3 MILLION, OR $.56 PER COMMON SHARE
Problem Assets Decline by $264 million, or 34 Percent
2Q 1Q 4Q 3Q 2Q
Net Income ($mm) $56.3 $36.3 $10.3 $13.0 $8.6
Common Share ($) .56 .35 .08 .14 .09
Return on Average
Common Equity (pct)15.36 9.62 2.18 3.88 2.65
Return on Average
Assets (pct) .89 .62 .17 .23 .16
HARTFORD, Conn., and BOSTON, July 14 /PRNewswire/ -- Shawmut National Corporation (NYSE: SNC) reported net income for the second quarter of 1993 of $56.3 million, or $.56 per common share, an increase of $20.0 million, or 55 percent, from the $36.3 million reported in 1993's first quarter, and an increase of $47.7 million from the $8.6 million of net income reported in the second quarter of last year. Net income for the second quarter of 1992 included a $12.6 million gain from the sale of automobile loan pass-through certificates and an extraordinary credit of $2.2 million from the realization of net operating loss carryforwards. There were no significant securities gains included in net income during the 1993 second quarter.
"With problem assets down by 34 percent in the second quarter to 3.38 percent of total loans plus foreclosed properties, Shawmut is putting its asset quality problems behind it in a conclusive manner," observed Joel B. Alvord, chairman and chief executive officer. "But the emerging story at Shawmut is one of growing earnings power. Core earnings exceeded $94 million as Shawmut demonstrated sustained profitability for the eighth consecutive quarter." Core earnings are defined as earnings before credit costs, taxes and special items. Core earnings were $94.4 million in the second quarter of 1993, compared with $77.7 million in the first quarter of 1993, an increase of 21 percent, and $74.2 million during the second quarter of 1992, an increase of 27 percent.
Shawmut announced the closing of two bulk sales of real estate assets with a carrying value of $309.8 million in the second quarter which contributed $181.0 million to the total $264.0 million decline in problem assets achieved during the quarter. Problem assets, defined as nonaccruing loans plus foreclosed properties, declined to $513.1 million at June 30, 1993 from $777.1 million at March 31, 1993. Nonaccruing loans plus foreclosed properties were $1.327 billion at June 30, 1992, $813.9 million, or 159 percent, higher than the June
30, 1993 level. Twenty-nine percent of nonaccruing loans were less than 30 days past due and 39 percent were less than 90 days past due at June 30, 1993.
The ratio of problem assets to loans plus foreclosed properties was 3.38 percent at June 30, 1993, down from 5.12 percent on March 31, 1993 and 9.50 percent on June 30, 1992. The reserve for loan losses was 171 percent of nonaccruing loans at June 30, 1993, compared with 139 percent at the end of the first quarter of 1993 and 103 percent at the end of the second quarter of 1992.
INCOME STATEMENT HIGHLIGHTS