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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|Date:||Apr 28, 1992|
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