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D&N FINANCIAL ANNOUNCES PROFITABLE 1992 FIRST QUARTER

 D&N FINANCIAL ANNOUNCES PROFITABLE 1992 FIRST QUARTER
 HANCOCK, Mich., April 28 /PRNewswire/ -- D&N Financial Corp.


(NASDAQ-NMS: DNFC) today announced net income of $869,000, or $0.23 per share, for the first quarter of 1992, compared with net income of $1.6 million, or $0.43 per share, for the first quarter of 1991. Current income included non-recurring gains on asset sales and valuation adjustments that netted $2.6 million. In the first quarter of 1991, similar items netted $8.7 million.
 D&N's net interest income for the quarter, at $6.1 million, was down compared to $8.6 million for the first quarter of 1991. According to Kenneth D. Seaton, chairman, this decline was primarily due to the managed downsizing of the company's balance sheet in order to improve capital. This is reflected in a decline in average total assets to $1.502 billion during the quarter, compared to $1.809 billion in the first quarter of 1991.
 Seaton noted that during the quarter, the bank repaid a maturing $50 million fixed-rate advance from the Federal Home Loan Bank (FHLB), which resulted in a decrease in total borrowings to $323 million at March 31, 1992. "The retirement of this FHLB advance on March 25 will result in a higher overall spread and improved net interest income, since lower yielding liquid assets were employed to repay the advance."
 At March 31, 1992, the capital ratios of D&N Bank, fsb, the company's sole subsidiary, were: tangible, 3.60 percent; core, 4.60 percent; and risk-based, 9.27 percent. The company intends to increase its tangible capital ratio to at least 4.00 percent by Dec. 31, 1992, and to at least 4.50 percent by Dec. 31, 1993, consistent with an agreement with the Office of Thrift Supervision which was voluntarily adopted by the company's directors in April.
 Core income for the quarter was a negative $518,000, or $0.14 per share, compared to a negative $3.9 million, or $1.07 per share, for the first quarter of 1991. Provisions for reserves and the high cost of the long-term interest rate exchange agreements were primarily responsible for the negative core income in each year.
 In the first quarter of 1992, the bank added $1.2 million to its general valuation allowance for real estate acquired in settlement of loans, while in the first quarter of 1991, $7.2 million was added to loan loss reserves. The bank's total reserves for loan and real estate losses were $19.8 million at March 31, 1992. Loan loss reserves were 2.32 percent of total loans and 54.65 percent of nonperforming loans, while the general valuation allowance accounted for 4.21 percent of other real estate owned.
 Other real estate owned declined to $40.3 million at quarter-end from $42.8 million at Dec. 31, 1991, and $44.8 million at March 31, 1991. "We feel that recent reductions in our portfolio of other real estate owned is evidence of our continuing progress in that area," stated Seaton.
 General and administrative expenses declined 13 percent to $6.7 million from $7.7 million in the first quarter of 1991. Mortgage loan production for the first quarter totaled $23.2 million, compared to $64.8 million in the 1991 first quarter. The decline in the bank's mortgage production is consistent with the company's strategic plan to sharpen its focus on community banking in its primary markets. The prior year's production totals included loans originated by offices, since sold or closed, of the bank's mortgage banking subsidiary. Consumer loan volume was $16.1 million, up from $13.9 million for the previous year's period. At March 31, 1992, D&N had net loans and mortgage-backed certificates of $1.03 billion and deposits of $959 million. Stockholders' equity was $93.9 million.
 At the company's annual meeting of stockholders, held April 28, 1992, Seaton announced his retirement as chief executive officer of the company. Seaton had retired as CEO of D&N Bank at the 1991 stockholders' meeting. He stated that he will continue to serve on the company's board of directors. George J. Butvilas, president and CEO of D&N Bank and president of D&N Financial Corporation, was named chief executive officer of the company, replacing Seaton.
 Also at the 1992 stockholders' meeting, the company announced the re-election of Seaton, Warren J. Brule and Randolph P. Piper as well as the election of Tammy Wong to fill a vacancy in the board of directors. Wong is an independent financial/investment analyst. She has held positions as controller of Sterling Savings Bank, FSB, and of Regency Savings Bank, FSB.
 D&N Financial Corporation, through its subsidiary, D&N Bank, fsb, has 31 full-service banking offices and eight agency offices throughout Michigan's Upper Peninsula and mid-Michigan. D&N is the fourth-largest savings institution in Michigan based on asset size. D&N Financial Corporation's stock is traded over the counter and is quoted on the NASDAQ National Market System under the symbol DNFC.
 D&N FINANCIAL CORPORATION
 FINANCIAL HIGHLIGHTS
 (Dollars in thousands, except per-share data)
 For The Quarter Ended: 3/31/92 12/31/91 3/31/91(2)
 Net interest income $6,103 $5,949 $8,574
 Net noninterest expense 4,457 3,350 6,104
 Net income 869 828 1,593
 Net income per share 0.23 0.22 0.43
 Operations:
 New loans originated 39,258 83,166 78,744
 Increase (decrease) in deposits (20,188) (15,644) (38,144)
 Increase (decrease)
 in borrowings (51,086) (27,355) (58,077)
 Earning assets yield 8.96 pct 9.24 pct 9.86 pct
 Cost of funds 7.38 pct 7.69 pct 7.91 pct
 Net interest margin(1) 1.77 pct 1.75 pct 2.10 pct
 At Quarter End:
 Total assets 1,455,288 1,518,930 1,771,693
 Cash, interest-bearing deposits
 and investment securities 228,910 213,229 97,002
 Net loans receivable 761,686 813,805 1,051,919
 Mortgage-backed certificates 273,043 295,246 350,516
 Mortgage derivative products 64,050 69,994 130,149
 Deposits 959,395 979,583 1,066,667
 Borrowings 322,765 373,851 540,085
 Stockholders' equity(3) 93,866 92,997 91,017
 Stockholders' equity as a percent
 of total assets 6.45 pct 6.12 pct 5.14 pct
 Per-share data:
 Closing price 6 3/4 5 1/8 3 1/2
 Price range 4 3/4-7 3/4 2 3/4-5 1/2 2 1/2-4 1/8
 Stockholders' equity - GAAP 25.31 25.08 24.54
 Stockholders' equity - tangible 16.03 15.74 15.09
 Loans serviced for others 281,442 696,522 1,179,702
 Nonperforming assets 75,370 66,951 63,566
 Loan loss reserves:
 Amount 18,110 18,693 19,849
 As a percent of
 nonperforming loans 54.65 pct 78.94 pct 105.72 pct
 As a percent of total loans 2.32 pct 2.24 pct 1.85 pct
 Regulatory capital ratios:
 Tangible capital 3.60 pct 3.36 pct 2.78 pct
 Core capital 4.60 pct 4.86 pct 4.28 pct
 Risk-based capital 9.27 pct 9.66 pct 8.32 pct
 (1) -- Net interest income divided by average earning assets.
 (2) -- Certain amounts have been reclassified to conform with the current period presentation.
 (3) -- The number of common shares outstanding was 3,708,418 in all periods.
 D&N FINANCIAL CORPORATION
 CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended
 March 31
 1992 1991(1)
 (in thousands, except per share)
 Interest income:
 Loans $19,302 $27,876
 Mortgage-backed certificates 6,054 7,981
 Mortgage derivative products 2,044 3,950
 Investments and deposits 3,347 1,794
 Total interest income 30,747 41,601
 Interest expense:
 Deposits 13,030 18,310
 Securities sold under agreements
 to repurchase 37 3,277
 FHLB advances and other borrowed money 7,104 8,685
 Interest rate instruments 4,473 2,755
 Total interest expense 24,644 33,027
 Net interest income 6,103 8,574
 Provision for loan losses --- 7,250
 Net interest income after provision
 for loan losses 6,103 1,324
 Noninterest income:
 Loan servicing and administrative fees 1,002 1,407
 Deposit related fees 808 768
 Gain (loss) on loan inventory (48) 426
 Other income 121 102
 1,883 2,703
 Realized and unrealized gain (loss)
 on investment securities --- (56)
 Realized and unrealized gain (loss)
 on loans, mortgage-backed certificates
 and mortgage derivative products (418) 5,150
 Gain on sale of other real estate owned 10 42
 Gain on sale of loan servicing rights 3,040 1,824
 Total noninterest income 4,515 9,663
 Noninterest expense:
 Compensation and benefits 3,376 4,321
 Occupancy 514 638
 Other expense 2,796 2,763
 General and administrative expense 6,686 7,722
 Losses on other real estate owned 1,232 1,400
 Amortization of intangibles 492 492
 Federal deposit insurance premiums 562 625
 Total noninterest expense 8,972 10,239
 Gain on termination of interest rate
 exchange agreements --- 1,722
 Income before income tax expense 1,646 2,470
 Federal income tax expense 777 877
 Net income $869 $1,593
 Net income per share $.23 $.43
 (1) -- Certain amounts have been reclassified to conform with the current period presentation.
 -0- 4/28/92
 /CONTACT: Joann Cadwell of D&N Financial Corporation, 906-487-6225/
 (DNFC) CO: D&N Financial Corporation ST: Michigan IN: FIN SU: ERN


SM-JK -- DE022 -- 3973 04/28/92 15:55 EDT
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