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FIRST EASTERN: 4TH QUARTER PROFIT, 12 PERCENT REDUCTION IN NONPERFORMING ASSETS, IMPROVED CAPITAL RATIOS, PROVISION FOR RESTRUCTURING EXPENSE

 WILKES-BARRE, Pa., Jan. 20 /PRNewswire/ -- First Eastern Corp. (NASDAQ: FEBC) today reported net income of $2.6 million, or 25 cents per share for the fourth quarter of 1992.
 This marks a return to profitability for the corporation after five consecutive quarters of losses, and compares to a loss of $35.5 million, or $3.50 per share, for the same period in 1991. These results, including the first quarterly profit in over a year, were primarily influenced by a reduction in nonperforming assets, a gain on the sale of non-strategic assets, relatively stable core operating expenses, and widening net interest margins.
 Frederick A. Deal, president and chief executive officer of First Eastern Bank, N.A., principal subsidiary of First Eastern Corp., said, "In view of the challenges we faced over the past two years, it is pleasing to report progress on a number of fronts in the fourth quarter. More important than the return to profitability is the demonstrable improvement in the quality of the balance sheet which evidenced itself in two primary areas: loan quality and capital levels."
 Deal pointed out that nonperforming assets appeared to peak during early summer and trended down sharply during the fourth quarter. During this time period, nonperforming assets, excluding past due loans, declined to $119 million at Dec. 31, 1992, from $136 million at Sept. 30, 1992, a 12 percent reduction. "During the quarter we continued to deal aggressively with our loan portfolio and strengthen our loan loss provision," said Deal. The company added $12.3 million to the allowance for possible loan and lease losses in the fourth quarter, increasing the allowance as a percentage of outstanding loans from 4.28 percent at September 30, 1992, to 4.47 percent at year end. At the same time, the allowance as a percentage of nonperforming loans increased from 71.09 percent at Sept. 30, 1992, to 74.54 percent at Dec. 31, 1992.
 The company sold certain assets as part of its plan to reduce the size of its balance sheet during the period. These sales included approximately $156 million of fixed rate retail mortgages and a $36.3 million credit card portfolio. In addition, First Eastern completed the sale of its Dolphin and Bradbury subsidiary, a securities dealer and underwriter headquartered in Philadelphia. According to Deal, "These asset sales resulted in a one-time gain of $9 million, both decreasing the company's interest rate sensitivity and allowing us to focus our efforts more clearly on our core businesses."
 Importantly, the reduced balance sheet and the premium earned on asset sales have boosted capital ratios. As of Dec. 31, 1992, the company's total risk-weighted capital ratio was 8.79 percent, the Tier I ratio was 7.51 percent, and the leverage ratio was 5.19 percent. On that date, the company's principal subsidiary, First Eastern Bank, N.A., had a total risk-weighted capital ratio of 8.59 percent, a Tier I ratio of 7.31 percent, and a leverage ratio of 5.04 percent. FDICIA minimum guidelines for an adequately capitalized bank are ratios of 8 percent for total capital, 4 percent for Tier I capital and 3 percent for leverage.
 "Going forward, we will continue to explore a number of strategic options for improving our financial performance further," said Deal. "For example, during the first quarter of 1993, we will undertake a program of profit improvement initiatives to enhance fee income and reduce operating expenses. We believe that these initiatives are consistent with the company's strategic direction and are designed to enhance First Eastern's improving profitability over the long term." In anticipation of restructuring expenses related to the profit improvement program, the company booked a one-time charge to earnings of approximately $1.5 million in the fourth quarter.
 For the year ended Dec. 31, 1992, First Eastern reported a net loss of $29.2 million, or $2.89 per share. This represents a 15 percent improvement over the $34.3 million loss ($3.40 per share) reported for 1991. The improvement was primarily attributable to a reduction in the loan loss provision from $71 million in 1991 to $55 million in 1992, a 22 percent decrease. Additionally, during the year the allowance for possible loan and lease losses as a percentage of loans increased to 4.47 percent at Dec. 31, 1992, from 3.69 percent at year end 1991.
 Assets at Dec. 31, 1992, were $2.3 billion, an 18 percent decrease from the $2.8 billion at December 31, 1991. Loans decreased to $1.6 billion from $1.9 billion, and deposits declined to $2.1 billion from $2.5 billion at year end 1991.
 "1992 was a year of challenge and transition for First Eastern Corp.," concluded Deal. "While we are disappointed that the company experienced a loss for the year, we are heartened by the improvements that have occurred in our asset quality, capital ratios, and quarterly earnings. These positive developments have strengthened the company and provided a foundation on which to pursue further profit improvement initiatives."
 First Eastern Corp. is a one-bank holding company headquartered in Wilkes-Barre, PA. Its principal subsidiary, First Eastern Bank, N.A., serves a nine-county region in northeast Pennsylvania through 60 branch offices.
 FIRST EASTERN CORP.
 Summary of Operations
 (Dollars in thousands, except per-share)
 Quarter ended Dec. 31 1992 1991
 Net interest income 26,302 24,689
 Loan loss provision 12,350 43,579
 Net interest income (loss) after
 provision for loan loss 13,952 (18,890)
 Other income 15,668 6,548
 Other expenses 27,050 23,258
 Net income (loss) before income 2,570 (35,600)
 tax
 Income tax (benefit) --- (3,326)
 Net income (loss) before cumulative
 effect of accounting change 2,570 (32,274)
 Cumulative effect of accounting
 change --- (3,189)(A)
 Net income (loss) after cumulative
 effect of accounting change 2,570 (35,463)
 Earnings per common share:
 Net income (loss) before cumulative
 effect of accounting change $.25 (3.19)
 Net income (loss) after cumulative
 effect of accounting change $.25 (3.50)
 Weighted average common shares 10,138,863 10,121,825
 Year ended Dec. 31 1992 1991
 Net interest income 101,569 100,689
 Loan loss provision 54,850 70,676
 Net interest income after
 provision for loan loss 46,719 30,013
 Other income 41,909 26,110
 Other expenses 117,877 95,242
 Loss before income tax (29,249) (39,119)
 Income tax (benefit) --- (3,655)
 Net loss before cumulative effect
 of accounting change (29,249) (35,464)
 Cumulative effect of accounting
 change --- 1,153(A)
 Net income (loss) after cumulative
 effect of accounting change (29,249) (34,311)
 Earnings per common share:
 Net loss before cumulative effect
 of accounting change (2.89) (3.52)
 Net income (loss) after cumulative
 effect of accounting change (2.89) (3.40)
 Cash dividends declared per share --- .71
 Weighted average common shares 10,135,468 10,080,565
 (A) Cumulative effect on prior periods of accounting change for income taxes.
 (Dollars in millions)
 Dec. 31, 1992 Dec. 31, 1991
 Loans, net 1,582 1,889
 Deposits 2,111 2,499
 Stockholders's equity 135 164
 Selected ratios:
 Allowance for loan loss
 as a percentage of loans,
 net 4.47 percent 3.69
 Loans to deposits 74.92 percent 75.57
 Equity to assets 5.79 percent 5.91
 Capital ratios at Dec. 31, 1992
 First Eastern Corp. First Eastern Bank,N.A.
 Minimum (Consolidated) (Bank Subsidiary)
 Tier I 4 percent 7.51 7.31
 Total Capital 8 percent 8.79 8.59
 Leverage
 ratio 3-5 percent 5.19 5.04
 /delval/
 -0- 1/20/93
 /CONTACT: Tony Cusatis of First Eastern Corp., 717-821-3211/
 (FEBC)


CO: First Eastern Corp. ST: Pennsylvania IN: FIN SU: ERN

CC -- PH015 -- 6884 01/20/93 12:26 EST
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Date:Jan 20, 1993
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