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CORESTATES REPORTS STRONG FIRST QUARTER, IMPROVING BUSINESS CLIMATE

 CORESTATES REPORTS STRONG FIRST QUARTER, IMPROVING BUSINESS CLIMATE
 PHILADELPHIA, April 21 /PRNewswire/ -- CoreStates Financial Corp (NASDAQ: CSFN) today reported first quarter net income of $58,196,000 or $1.06 per share amid clear signs that the business climate is improving in the bank holding company's key markets.
 Last year's first quarter net income was 94 cents per share, both before and after restatement to reflect FAS 109, a new rule changing the way companies account for deferred taxes. Earnings per share were up 12.8 percent year-to-year.
 CoreStates' profitability measures continued to improve from strong levels of the year-ago and fourth quarters, and remain among the highest for large banks nationwide. This year's first quarter results represented a return on average assets of 1.11 percent and a return on average equity of 15.04 percent.
 Terrence A. Larsen, chairman, said the earnings improvement reflected strength across the board in CoreStates' businesses and "makes us optimistic about 1992."
 On the credit side, he said the decline in loan demand associated with the recession appeared to be bottoming out, and there were signs of improvement in the loan pipeline. Average volumes were below a year ago and roughly flat compared to the fourth quarter, in part because of the sale of $1 billion credit card outstandings in the fourth quarter. However, earnings benefited from a strong net financial margin of 5.64 percent. The first quarter 1991 margin was 5.47 percent.
 The reduction in credit card outstandings and an improving outlook for credit quality enabled CoreStates to reduce its provision for loan losses compared to all 1991 quarters.
 Larsen said the quarter also saw a recovery in the fee-based electronic payments processing businesses, which had experienced transaction volume declines in the fourth quarter. Overall revenues from basic banking transaction services were up 13 percent from a year earlier.
 He said the quarter also saw some benefits from the company's recent added emphasis on expense management. Salary and benefit expenses were flat compared to the fourth quarter and up less than 5 percent year-to- year.
 Non-performing assets declined for the third consecutive quarter to $433 million at March 31, of which there were $334 million non-accrual loans, $31 million renegotiated loans and $68 million in real estate foreclosed or under in-substance foreclosure.
 The provision for loan losses was $33 million, bringing the consolidated loan loss reserve to $338 million, or 93 percent of non- performing loans. CoreStates' holdings of foreclosed real estate are carried on the books at conservative levels compared to current market value.
 Net charge-offs continued to decline, to $33 million in the first quarter compared to $61 million a year ago and $40 million in the fourth quarter.
 "We're encouraged that charge-offs have fallen this much while still using the same aggressive criteria we applied to charge-offs all last year," Larsen said. "We're seeing the benefits of our earlier actions, in addition to effects of some easing of the economic pressures on our customers."
 CoreStates' consolidated total assets at March 31 were $21.8 billion, including consolidated net loans of $15.0 billion. Consolidated total deposits were $15.9 billion.
 Shareholders' equity was $1.6 billion, representing 7.2 percent of total assets. CoreStates' Tier 1 leverage ratio (Tier 1 or core capital as a percentage of quarterly average assets) was 7.2 percent for the first quarter.
 Tier 1 capital at March 31 was 8.1 percent of risk-adjusted assets and total capital was 12.3 percent of risk-adjusted assets, compared to regulatory requirements of 4 percent and 8 percent, respectively, by year end.
 Adoption of the FAS 109 rule requires that past earnings be restated, with the general effect of changing the years in which certain tax benefits are recognized. For the full year 1991, this effect will be to reduce earnings from the originally reported $4.19 per share to $4.03 per share; for the year 1990, the effect will be to increase earnings from the originally reported $2.06 to $2.21 per share. The restatements have no material impact on CoreStates' current financial position.
 CORESTATES FINANCIAL CORP
 (In thousands, except per-share amounts)
 Three months ended March 31 1992 1991
 Net income applicable to common stock $58,196 $51,203(A)
 Per common share $1.06 $.94
 Average number of shares outstanding 55,003 54,333
 (A) Restated to reflect CoreStates' retroactive adoption of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (FAS 109). The impact of FAS 109 on the first quarter of 1991 provision for income taxes was a decrease of $384,000.
 /delval/
 -0- 4/21/92 R
 /CONTACT: Gary Brooten or Gregg Feistman of CoreStates, 215-973-3546/
 (CSFN) CO: CoreStates Financial Corp ST: Pennsylvania IN: FIN SU: ERN


KA -- PH003 -- 0573 04/21/92 11:20 EDT
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Date:Apr 21, 1992
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