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CONTINENTAL BANK, N.A. $100 MILLION SUBORDINATED NOTES RATED 'BBB'

 CHICAGO, Jan. 26 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of BBB' (Triple-B) to the $100 million subordinated note offering of Continental Bank, N. A. The 7-7/8 percent subordinated notes were priced to yield 7.894 percent to maturity. The noncallable notes are due Feb. 1, 2003.
 Continental Bank, N.A., is the principal subsidiary of Continental Bank Corporation. The rating trend is stable and reflects strengthening in capitalization, improvement in liquidity resulting from a lengthening in the liability structure, and improving profitability. While profitability improved in 1992 with Continental Bank Corporation reporting net income of $222 million, 1.01 percent return on assets, compared with a loss of $76 million in 1991, earnings continue to include a substantial level of revenues from equity investments. These revenues, which totaled $150 million in 1992 and $131 million in 1991, are potentially more volatile than other sources of revenue. While Continental has made progress in expanding profit opportunities within its customer base, including both non-credit related and spread related, continued penetration within its existing customer base and increasing relationships is critical to growing core earnings.
 As a result of its corporate bank strategy, Continental has downsized its balance sheet which has positively affected capitalization ratios. Stockholders' equity equaled 7.51 percent of assets at Dec. 31, 1992, with common equity equaling 5.78 percent. At Dec. 31, 1992, Continental Bank, N.A., exceeded the capital ratios required by regulatory agencies to be considered "well capitalized" with an estimated Tier 1 ratio of 7.8 percent and estimated Tier 2 of 10.4 percent. During this period of real estate market instability and economic weakness, asset quality deteriorated. Nonperforming assets equaled 6.64 percent of loans and other real estate owned at yearend 1992 compared to 5.83 percent, one year earlier. Problems have been centered in the real estate and highly leveraged transaction portfolios. The loan loss reserve is adequate at 3.00 percent of loans and 57 percent of nonaccrual loans.
 Continental Bank Corporation with total assets of $22.5 billion ranks among the 30 largest U.S. bank holding companies.
 -0- 1/26/93
 /CONTACT: Charles J. Orabutt, CPA of Duff & Phelps, 312-368-3153/


CO: Continental Bank, N.A. ST: Illinois IN: FIN SU: RTG

SH -- NY078 -- 9149 01/26/93 14:25 EST
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Publication:PR Newswire
Date:Jan 26, 1993
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