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CONTINENTAL BANK CORPORATION REPORTS FIRST-QUARTER EARNINGS OF $63 MILLION, OR $1.02 PER SHARE, VERSUS $61 MILLION, OR $0.96 PER SHARE, FOR THE SAME PERIOD LAST YEAR

 Revenues Decrease 6 Percent to $252 Million;
 Operating Expenses Total $151 Million, Up 6 Percent;
 Provision for Credit Losses Down 46 Percent to $30 Million
 Nonperforming Assets Decrease $377 Million, or 43 Percent,
 from March 31, 1993, to $498 Million;
 Reserve to Nonperforming Loans Improves to 121 Percent
 CHICAGO, April 18 /PRNewswire/ -- Continental Bank Corporation (NYSE: CBK) today reported first-quarter earnings of $63 million, or $1.02 per share, an increase of 3 percent from a year ago, excluding the $80 million cumulative effect of an accounting change for income taxes in the 1993 quarter. On this basis, the return on common equity was 14.3 percent for the first quarter of 1994, compared with 16.2 percent for the same period last year.
 "These earnings reflect the continued success of our client-focused strategy," said Chairman Thomas C. Theobald. "Despite considerable volatility in financial markets, our well-balanced portfolio of client services produced a very satisfactory quarter."
 The improved results were due to significantly lower credit costs, partially offset by lower revenues and an increase in operating expenses. First-quarter 1994 revenues decreased from the comparable 1993 period, due to declines in net interest revenues, trading profits and revenues from equity investments, despite increases in fees and commissions, lease financing revenues and lower foreign-exchange translation losses.
 BANKING PRODUCT REVENUES
 Total banking product revenues decreased 8 percent from the first quarter of last year. Banking product revenues include management's internal allocations of funding costs.
 First Quarter
 ($ in millions) 1994 1993(A)
 Corporate Finance $128 $145
 Specialized Financial Services 71 65
 Trading 19 23
 Equity Financing 31 39
 Total Banking Product Revenues 249 272
 All Other 3 (5)
 Total Revenues $252 $267
 (A) Restated to conform to the current period's presentation.
 Corporate finance revenues, which include revenues from lending, syndication and distribution activities, decreased 12 percent from the first quarter of 1993. The decline was primarily due to a narrower net interest margin (partially due to lower cash collections from Latin American nonperforming loans), a decrease in average loans and lower gains on the sale of Latin American debt.
 Revenues from specialized financial services increased 9 percent from the year-ago quarter, primarily due to higher fees for corporate deposit and related services. Specialized financial services revenues include fees for cash and securities management, fiduciary services and private banking.
 The market volatility in the first quarter of 1994 resulted in lower trading and equity-investment revenues. Revenues from trading activities fell $4 million, or 17 percent, from the same quarter last year, due to market conditions, particularly the severe drop in the prices of Latin American and other emerging-markets securities. This decrease was partially offset by higher revenues from customer-driven foreign-exchange revenues.
 Equity financing revenues for the first quarter of 1994 declined $8 million from the 1993 first quarter. Domestic equity revenues amounted to $24 million in the 1994 period, down $5 million from last year's quarter. The equity-investment portfolio on March 31, 1994, amounted to $639 million, up $117 million from a year ago.
 All other revenues increased over the 1993 quarter, partly due to lower foreign-exchange translation losses and the recognition of collections on receivables retained from a business sold.
 OPERATING EXPENSES
 First Quarter
 ($ in millions) 1994 1993
 Employee $ 79 $ 72
 Occupancy & Equipment 17 15
 Other Operating 55 56
 Total Operating Expenses $151 $143
 Operating Staff Level 4,233 4,187
 First-quarter 1994 operating expenses increased 6 percent over the 1993 period. Higher employee expense resulted from an increase in base salaries and incentive compensation. Staff levels increased slightly from March 31 and Dec. 31, 1993.
 Other operating expenses in the 1994 first quarter benefited from a refund of previously disputed Brazilian transaction taxes and lower assessment for deposit insurance. These benefits were partially offset by nearly $3 million of depreciation expense on lease financing equipment. Prior to the first quarter of 1994, this expense, which was immaterial, was netted against the related revenues. As lease financing activities have increased, this expense was included in other operating expense beginning with the 1994 first quarter.
 INCOME TAXES
 Continental recorded income tax expense of $3 million in the first quarter of 1994, compared with a credit of $1 million in the year-ago quarter. In the first quarter of 1993, Continental recorded the cumulative effect of an accounting change of $80 million resulting from the adoption of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." The 1994 quarter benefited from the $3 million release of a foreign tax reserve related to the repatriation of capital.
 PROVISION AND RESERVE FOR CREDIT LOSSES
 The first-quarter provision for credit losses of $30 million decreased $26 million from the year-ago period, reflecting improved credit quality.
 The reserve for credit losses was $320 million, or 2.7 percent of total loans, on March 31, compared with $328 million, or 2.8 percent, on Dec. 31 and $400 million, or 3.2 percent, a year ago. The reserve for credit losses as a percent of nonperforming loans improved to 121 percent from 100 percent at year-end and 53 percent a year ago.
 Charge-offs of residential real estate loans amounted to $16 million in the 1994 first quarter, compared with $40 million in the year-ago quarter. For the 1994 first quarter, general corporate charge-offs (including highly leveraged transactions) amounted to $19 million, and were $14 million for the 1993 quarter. Recoveries on Latin American loans totaled $26 million in the first quarter of 1993.
 First Quarter
 ($ in millions) 1994 1993
 Charge-Offs $ 40 $ 56
 Recoveries (2) (31)
 Net Charge-Offs $ 38 $ 25
 NET COSTS OF OTHER NONPERFORMING ASSETS (ONPA)
 First-quarter 1994 net costs of ONPA were $5 million, down from $8 million in the 1993 quarter. The components of net costs of ONPA are write-downs, gains and losses from sales and net operating and legal expenses. ONPA comprises other real estate owned (OREO) and all other nonperforming assets.
 The combined costs of credit provisions, forgone revenue on nonperforming loans and ONPA costs were $40 million in the first quarter of 1994, compared with $72 million in last year's first quarter.
 NONPERFORMING ASSETS
 Nonperforming assets, including loans, increased $3 million from Dec. 31, 1993, but decreased $377 million, or 43 percent, from March 31 of last year. Nonperforming loans decreased $63 million, or 19 percent, from Dec. 31, and $490 million, or 65 percent, from a year ago, due to sales and charge-offs. The ratio of nonperforming loans to total loans on March 31, 1994, was 2.3 percent, down from 6.1 percent a year ago. OREO, primarily commercial real estate, increased $72 million from Dec. 31 and $111 million from March 31, 1993. The increase is primarily attributable to one commercial property.
 March 31 Dec. 31 March 31
 ($ in millions) 1994 1993 1993
 General Corporate $164 $190 $300
 Commercial Real Estate 19 35 61
 Residential Real Estate 81 102 308
 Latin American 1 1 86
 Total Nonperforming Loans 265 328 755
 OREO (B) 208 136 97
 All Other Nonperforming Assets(B) 25 31 23
 Total Other Nonperforming Assets 233 167 120
 Total Nonperforming Assets $498 $495 $875
 Nonperforming Loans to Total
 Loans 2.26% 2.80% 6.12%
 (B) Includes credits designated as being in-substance foreclosed for accounting purposes.
 Continental monitors its loans by dividing them into four portfolios. The general corporate portfolio, which approximates $9 billion, is Continental's largest and strategically most important. Nonperforming loans in this portfolio (which includes highly leveraged transactions) declined 14 percent from year-end and 45 percent since March 31, 1993. At quarter-end 1994, general corporate nonperforming loans represented less than 1.5 percent of this portfolio.
 Nonperforming assets in the commercial real estate portfolio rose to 13 percent of that portfolio on March 31. Approximately 27 percent of the residential real estate assets, mostly credits to real estate developers for single-family homebuilding, was nonperforming.
 California residential real estate assets were reduced from $282 million at year-end to approximately $237 million at quarter-end, 63 percent of which was nonperforming. The reductions primarily resulted from sales, charge-offs and write-downs. At quarter-end, the carrying value of these nonperforming assets was approximately 30 percent, down from 35 percent at year-end. Nonperforming assets in the non-California residential real estate portfolio represented less than 7 percent of that portfolio at quarter-end, about the same as at year-end.
 BALANCE SHEET
 Total assets of $22.8 billion on March 31 increased 1 percent from Dec. 31, 1993, and 3 percent from March 31, 1993. Loans decreased slightly from Dec. 31, and 5 percent from March 31, 1993.
 On Jan. 1, 1994, Continental adopted Financial Accounting Standards Board Interpretation No. 39, "Offsetting of Amounts Related to Certain Contracts." The effect was an increase in total assets and total liabilities of approximately $1 billion.
 Continental's equity-to-assets ratio was 8.5 percent on March 31, unchanged from Dec. 31 and up slightly from 8.2 percent a year ago. Book value per common share on March 31 was $30.02, compared with $30.01 on Dec. 31 and $26.33 a year earlier.
 CAPITAL RATIOS
 On March 31, the capital ratios of Continental Bank Corporation and Continental Bank N.A. exceeded the quantitative levels required to be categorized as "well capitalized." The corporation's estimated ratio of Tier 1 capital to risk-adjusted assets was 8.1 percent, and total capital to risk-adjusted assets was 11.1 percent, up from 7.8 percent and 10.9 percent, respectively, a year ago. The corporation's leverage ratio (Tier 1 capital to quarterly average assets) was 8.8 percent on March 31, compared with 8.2 percent a year ago.
 -0- 4/18/94
 /NOTE TO EDITOR: On Jan. 28, 1994, Continental Bank Corporation (NYSE: CBK) and BankAmerica Corporation (NYSE: BAC) announced that they signed a definitive agreement for BankAmerica to acquire Continental. The acquisition is expected to close in the third quarter of 1994.
 Continental Bank Corporation is a bank holding company that focuses on meeting the capital and financial management needs of public and privately held businesses nationwide. Through its subsidiaries, the company provides business financing, specialized financial and operating services and private banking services. Continental also engages in equity finance and investing, as both principal and arranger, and international trading.
 /CONTACT: Lisa Hewitt 312-923-5166, or Edgar McDougal, 312-923-5200, or William Murschel 312-923-5130, both of Continental Bank/
 (CBK)


CO: Continental Bank Corporation ST: Illinois IN: FIN SU: ERN

TW -- NY087 -- 8829 04/18/94 13:25 EDT
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