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FIRST EASTERN ANNOUNCES SPECIAL LOAN LOSS PROVISION; EXPECTS LOSS FOR THE YEAR; OMITS DIVIDEND

 FIRST EASTERN ANNOUNCES SPECIAL LOAN LOSS PROVISION;
 EXPECTS LOSS FOR THE YEAR; OMITS DIVIDEND
 WILKES-BARRE, Pa., Nov. 20 /PRNewswire/ -- First Eastern Corp. (NASDAQ: FEBC) today announced several corporate actions in response to a stalling national economic recovery, which has negatively affected business conditions in northeast, Pennsylvania, the company's primary marketplace.
 Special Loan Loss Provision:
 "Looking ahead, there are indications that our primary operating area continues to be adversely affected by a difficult economic enviro nment. After careful consideration and consultation with regulatory authorities we have decided that our current economic assessment requires a special loan loss provision, said Richard M. Ross Jr., chairman and chief executive officer.
 This provision, amounting to approximately $27 million, will be charged to results for the fourth quarter ended Dec. 31, 1991, and is in addition to the company's normal fourth quarter provision. As a result of this provision the company is expecting a loss for the year of an estimated range of $2.70 to $3.00 per share.
 Despite concern for the immediate economic prospects in the region, Ross noted that the company has made progress in improving asset quality. He reported that First Eastern's total nonperforming assets reached a level of $156 million at June 30, 1991, were reduced to $149 million as of Sept. 30, 1991, and currently approximate $143 million. "This improvement notwithstanding, the time has come to strengthen further our ability to weather the impact of the continued downturn in the national economy on northeast Pennsylvania. This provision will place us in a stronger position to meet the ongoing challenges of the future," Ross continued.
 At Sept. 30, 1991, the company's ratio of reserves to loans had risen to 2.80 percent from 2.00 percent at Dec. 30, 1990, and 1.33 percent a year earlier. The provision will boost the reserve for possible loan losses as a percentage of total loans to approximately 3.40 percent and cover about 73 percent of nonaccrual loans and 66 percent of nonperforming loans.
 Dividend Policy:
 "Although we are optimistic about the eventual resurgence of our regional economy, a strong capital base is the indispensable foundation for banks to flourish. Accordingly, in order to conserve our financial resources the quarterly dividend has been omitted. We do expect to resume dividend payments when the company returns to appropriate levels of profitability," Ross stated.
 Consolidation Announced:
 Additionally, First Eastern announced plans to combine Peoples First National Bank and Trust Company with First Eastern Bank, N.A. Pending approval by regulatory agencies, this consolidation is expected to be completed early next year. Operating efficiencies and economies will result from this consolidation, while allowing the company to improve the quality of service to its customers in Luzerne County.
 Operating Strengths:
 "We believe strongly that we have the financial resources to not only persevere but prevail in today's challenging times," stated Ross. Unlike other regional banks experiencing asset quality problems, Ross pointed out that First Eastern has more than sufficient liquidity, a core funding base, and risk based capital ratios stronger than required by banking regulators.
 At Sept. 30, 1991, Tier 1 Capital was 8.63 percent, well above 1992 minimum regulatory risk based capital guidelines of 4 percent. Total risk-based capital of 9.90 percent exceeds the 1992 guidelines of 8 percent.
 "In addition to our leading regional market share, other fundamental operating strengths of the company that underline our financial position include a very strong branch network, a good record in controlling noninterest expense, solid fee generating capabilities with our Trust Department and Capital Markets Group leading the way, and an outstanding reputation for customer service excellence. Looking forward, we believe our core business strategies are sound and will support improved performance long term. These strategies include:
 -- reducing our nonperforming loans
 -- maintaining a strong capital position
 -- continuing strict control over expenses
 -- concentrating on supporting business borrowers in our local marketplace
 -- increasing our retail lending presence
 -- maintaining our core funding base
 -- continuing the enhancement of our franchise-sustaining a high level of community service
 "With the number of major steps we have taken to reduce costs, including the sale of two subsidiaries and outsourcing our data processing operations to a third party vendor, First Eastern does not presently anticipate any further significant reductions in staff levels," Ross concluded.
 First Eastern Corp., with assets of approximately $2.9 billion is the parent firm of First Eastern Bank, N.A., Wilkes-Barre, and Peoples First National Bank and Trust Company, Hazleton. The two banks have a total of 60 offices throughout a nine-county region of northeast Pennsylvania.
 /delval/
 -0- 11/20/91
 /CONTACT: Richard M. Ross Jr., chairman and CEO, 717-826-4621; William R. Mainwaring, president, 717-826-4634, or John W. Adonizio, treasurer, 717-821-4421, all of First Eastern/
 (FEBC) CO: First Eastern Corp. ST: Pennsylvania IN: FIN SU:


MK -- PH041 -- 5563 11/20/91 16:19 EST
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Date:Nov 20, 1991
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