Printer Friendly

FIRST AMERICAN REPORTS THIRD QUARTER EARNINGS AND DECLARES DIVIDEND

 NASHVILLE, Tenn., Oct. 21 /PRNewswire/ -- First American Corporation (NASDAQ-NMS: FATN) today reported net income of $27.7 million, or $1.07 earnings per share, during the third quarter of 1993, an increase of 133 percent on a per share basis from $10.9 million or $.46 per share, in the 1992 third quarter.
 In addition, the board of directors of First American Corporation today declared a quarterly cash dividend of $.15 per share on its common stock, which is payable on Nov. 30, 1993, to shareholders of record on Nov. 15, 1993.
 For the first nine months of 1993, net income equaled $72.4 million, or $2.80 per share, up 126 percent on a per share basis from $29.2 million, or $1.24 per share in the comparable 1992 period.
 "First American maintained the positive trends established in recent quarters," said Dennis C. Bottorff, president and CEO. "Asset quality continued to show strong improvement in the third quarter. Nonperforming assets declined by 20 percent since last quarter, and we reported a net loan loss recovery. These improvements enabled us to record a $10 million negative loan loss provision for the third quarter.
 "We are particularly encouraged by the recent growth in loan volumes and fee income revenues. Average loans were up over 6 percent (annualized) from fourth quarter 1992 levels, and if we exclude the run-off of our problem loan portfolio, average loans in the third quarter were up over 9 percent on an annualized basis. Non interest income was up 20 percent during the third quarter over last year, driven by the sales of investment products," Bottorff said.
 The 1993 third quarter set a record for First American in terms of pre-tax, pre-provision earnings. At $33.4 million (on a tax equivalent basis), these earnings exceeded the comparable 1993 second quarter earnings by over $1 million.
 Other important milestones included the recent announcement of First American Corporation's intent to acquire First Fidelity Savings Bank, F.S.B. of Crossville, Tenn., and on Oct. 1, 1993, the completion of First American's acquisition of First Federal Savings and Loan of Bowling Green, Ky., now operating as First American National Bank of Kentucky.
 First American's nonperforming assets, which include nonperforming loans of $32.1 million and foreclosed properties of $25.5 million, were $57.7 million at Sept. 30, 1993, down from $105.8 million one year ago, and $71.7 million at June 30, 1993. Nonperforming assets were 1.47 percent of total loans and foreclosed properties at quarter-end.
 The pipeline of potential problem loans also declined. These loans, internally categorized as "substandard" but still performing, were $91.3 million at Sept. 30, 1993, down 39 percent from $148.9 million at Sept. 30, 1992. In addition, net chargeoff levels improved. The company recorded a net loan loss recovery of $111,000 for the quarter ended Sept. 30, 1993, vs. a net loan chargeoff of $9.9 million in the comparable 1992 quarter. Net loan chargeoffs through nine months equaled $5.4 million in 1993, down 81 percent from $28.6 million in the comparable 1992 period.
 As a result of the continued improvements in asset quality, First American reduced its allowance for loan losses from $167.6 million at June 30, 1993, to $157.7 million, or 4.04 percent of net loans, at Sept. 30, 1993. The reduction in the allowance for loan losses resulted primarily from a $10.0 million negative provision for loan losses in the quarter, the second negative provision in 1993. Through nine months, the provision for loan losses amounted to a negative $18.0 million, down from a $29.5 million charge in 1992.
 First American reviewed its methodology for establishing its allowance for loan losses during the third quarter. Certain refinements were made to the allowance process which will assist management in continuing to arrive at an appropriate level for the allowance on a quarterly basis. The continuation of the improving asset quality trends and the refined allowance methodology may result in further reductions to the allowance in the future.
 The $10.0 million negative provision for loan losses contributed $.25 to per share earnings during the 1993 third quarter. The Return on Assets (ROA) and Return on Equity (ROE), adjusted for a zero provision for loan losses, equaled 1.25 and 16.14 percent respectively for the 1993 third quarter. For the nine months ended Sept. 30, 1993, the ROA and ROE, adjusted for a zero provision for loan losses in the second and third quarters, equaled 1.16 and 15.63 percent, respectively.
 Net interest income for the 1993 third quarter was $67.3 million on a tax equivalent basis, up 3.5 percent from $65.0 million a year ago. The net interest margin was 4.37 percent in the third quarter, up from 4.36 percent in the 1992 third quarter, and down from 4.44 percent in the 1993 second quarter. The decline in the third quarter net interest margin from the second quarter is primarily a result of lower yields on the securities portfolio.
 At Sept. 30, 1993, First American Corporation's total assets were $6.8 billion; loans net of unearned discount, $3.9 billion; deposits $5.4 billion; and shareholders' equity, $533.8 million. The total risk-based capital, Tier 1 and leverage ratios for the corporation were 13.82, 11.16, and 7.79 percent, respectively.
 First American Corporation is the Nashville-based parent company of First American National Bank, First American Trust Company and First American National Bank of Kentucky. Approximately 3,100 people work for First American in 138 banking offices.
 First American's stock is traded in the over-the-counter securities market and is quoted on the NASDAQ National Market System under the symbol FATN.
 FIRST AMERICAN CORPORATION AND SUBSIDIARIES
 Condensed Consolidated Statements of Operations
 Quarter Ended Nine Months Ended
 Sept. 30, Pct. Sept. 30, Pct.
 (in thousands) 1993 1992 Change 1993 1992 Change
 Interest income $105,673 $110,354 (4) $316,809 $335,720 (6)
 Interest expense 39,264 46,016 (15) 118,922 150,830 (21)
 Net interest
 income 66,409 64,338 3 197,887 184,890 7
 Provision for
 loan losses (10,000) 9,000 (211) (18,000) 29,500 (161)
 Non-interest
 income 24,309 20,291 20 66,362 58,256 14
 Non-interest
 expense 58,201 60,132 (3) 170,792 171,702 (1)
 Income before
 income tax
 expense 42,517 15,497 174 111,457 41,944 166
 Income tax expense 14,793 4,579 223 40,283 12,747 216
 Net income before
 cumulative effect
 of accounting
 principle changes 27,724 10,918 154 71,174 29,197 144
 Cumulative effect
 of changes in
 accounting
 principles net
 of tax, for
 postretirement
 benefits and
 income taxes -- -- NA 1,216 -- NA
 Net income $27,724 $10,918 154 $72,390 $29,197 148
 Per common share:
 Income before
 cumulative effect
 of accounting
 principle changes $1.07 $0.46 133 $2.75 $1.24 122
 Net income 1.07 0.46 133 2.80 1.24 126
 Cash dividends $0.15 0.10 50 $0.40 $0.10 300
 Weighted average
 common shares
 outstanding 25,941 23,622 25,890 23,534
 Condensed Consolidated Balance Sheets
 Sept. 30,
 (in thousands) 1993 1992
 Assets
 Cash and due from banks $ 348,821 $ 606,061
 Securities 2,041,757 2,066,889
 Federal funds sold and
 short-term investments 305,142 119,128
 Loans, net of allowance for possible
 loan losses of $157,711 and
 $181,914 respectively 3,748,802 3,447,631
 Other Assets 310,757 304,270
 Total Assets $6,755,279 $6,543,979
 Liabilities
 Deposits $5,395,720 $5,455,030
 Borrowed funds 692,627 547,660
 Other liabilities 133,083 85,661
 Total liabilities 6,221,430 6,088,351
 Shareholders' equity 533,849 455,628
 Total liabilities and
 shareholders' equity $6,755,279 $6,543,979
 Consolidated Financial Highlights
 Quarter Ended Nine Months Ended
 September 30, September 30,
 Pct. Pct.
 (in thousands) 1993 1992 Chg. 1993 1992 Chg.
 Per Common Share
 Net income before
 cumulative effect of
 accounting principle
 changes $1.07 $ 0.46 133 $2.75 $1.24 122
 Net income 1.07 0.46 133 2.80 1.24 126
 Cash dividends 0.15 0.10 50 0.40 0.10 300
 Common book value 20.56 17.77 16
 Average Balances
 Loans, net of unearned
 discount and net
 deferred loan fees $3,838,890 $3,616,285 6 $3,771,954 $3,688,816 2
 Securities 2,093,344 1,941,309 8 2,132,298 1,732,622 23
 Earning assets 6,111,701 5,928,783 3 6,074,049 5,850,228 4
 Total assets 6,724,993 6,489,342 4 6,694,516 6,408,099 4
 Demand deposits 1,119,486 1,038,281 8 1,096,703 1,008,603 9
 Interest-bearing
 deposits 4,306,068 4,410,202 (2) 4,358,206 4,374,985 -
 Total core deposits 5,058,346 5,034,916 0 5,068,816 4,994,996 1
 Total deposits 5,425,554 5,448,483 (0) 5,454,909 5,383,588 1
 Shareholders' equity 521,719 414,089 26 500,568 403,017 24
 Significant Ratios
 (percent)
 Return on average
 assets(A) 1.64 0.67 1.42 0.61
 Return on average
 equity(A) 21.08 10.49 19.01 9.68
 Net interest margin 4.37 4.36 4.42 4.29
 Equity to assets
 (average) 7.76 6.38 7.48 6.29
 Total risk-based
 capital ratio 13.82 11.77
 Leverage ratio 7.79 6.82
 Credit Quality Data
 Nonperforming assets:
 Nonperforming loans $32,140 $68,262 (53)
 Foreclosed properties 25,541 37,539 (32)
 Total nonperforming assets 57,681 105,801 (45)
 Nonperforming assets to loans
 plus foreclosed properties 1.47pct 2.89pct
 Allowance for possible loan losses $157,711 $181,914 (13)
 Percent of period-end loans 4.40pct 5.01pct
 Percent of nonperforming loans 490.70 266.49
 Net charge-offs: $(111) $9,854 101 $5,397 $28,617 (81)
 Percent of average loans
 (annualized) (0.01)pct 1.08pct 0.19pct 1.04pct
 (A) Calculated based on income before accounting principle changes.
 -0- 10/21/93
 /CONTACT: (Financial) Carroll Kimball, 615-748-2455 or fax 615-748-2755, or (Media) Vicki Kessler, 615-748-2912 or fax 615-748-2535, both of First American/
 (FATN)


CO: First American Corporation ST: Tennessee IN: FIN SU: ERN DIV

MM-JM -- CH010 -- 2103 10/21/93 17:18 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 21, 1993
Words:1753
Previous Article:BUCKEYE PARTNERS L.P. DECLARES CASH DISTRIBUTION
Next Article:EXIDE ELECTRONICS ANNOUNCES RECORD FOURTH QUARTER AND FISCAL 1993 REVENUES AND EARNINGS; ANNUAL EARNINGS PER SHARE UP 52 PERCENT
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters