FIRST EASTERN ANNOUNCES THIRD QUARTER RESULTS
FIRST EASTERN ANNOUNCES THIRD QUARTER RESULTS WILKES-BARRE, Pa., Oct. 21 /PRNewswire/ -- First Eastern Corp.
(NASDAQ: FEBC) today reported a net loss of $17.5 million equal to $1.73 per share for the third quarter ended Sept. 30, 1992.
For 1991's third quarter, First Eastern reported a net loss of $8 million, equal to $.80 per share. Frederick A. Deal, president and chief executive officer of First Eastern Bank, N.A. principal subsidiary of First Eastern Corp. said, "The loss for the current quarter was primarily the result of a previously announced special loan loss provision of $12 million. In addition, the company incurred $6 million in expenses associated with other real estate owned during the period which reflected the current economic environment in our primary marketplace." At Sept. 30, 1992, the allowance for possible loan and lease losses as a percentage of loans was 4.27 percent compared to 4.16 percent at June 30, 1992 and 2.8 percent at Sept. 30, 1991. Nonaccural loans were $105 million, an increase of $23 million over last year's third quarter levels, but relatively flat with $104 million at June 30, 1992. Other real estate owned, net of reserves, was $28 million vs. $50 million for 1991's third quarter and $32 million at June 30, 1992. In addition to taking the special provision, the bank will be undertaking a program of profit improvement initiatives. These initiatives include the sale of certain assets in line with a balance sheet restructuring and the pursuit of opportunities for improvement in the areas of fee income and operating expenses. The bank will continue to focus on its core business strengths in retail banking, commercial banking, trust and capital markets. Although nonperforming assets continue to adversely impact operations, the net interest margin expanded to 4.12 percent and 4.14 percent for 1992's third quarter and first nine months respectively. For 1991's third quarter and nine month period, the net interest margin was 3.91 percent and 3.94 percent respectively. First Eastern also announced that the board of directors approved the recommendation of its recently created Shareholder Value Committee to raise new equity capital in the first half of 1993 in order to achieve specified levels of Tier I capital as required by Federal regulatory agencies. Eberhard Faber, chairman of the board of directors and shareholder value committee said, "We explored a number of strategic options for improving the Tier I leverage ratio and based on our belief in the strength of the company's new management team, the promise of its strategic plan for the future and the strength of our retail franchise in northeastern Pennsylvania, the board of directors has elected to pursue the sale of additional capital. This decision was based upon plans submitted by management which anticipate an early return to profitability as well as improvement in the company's nonperforming assets." First Eastern Corp., parent firm of First Eastern Bank, N.A. is a one-bank holding company with assets of approximately $2.5 billion serving a nine-county region of northeastern Pennsylvania through 60 branch offices. Deal was named president and chief executive officer of First Eastern Bank on Aug. 20, 1992, while Faber was named chairman of the board of directors of the holding company on Sept. 16, 1992. FIRST EASTERN CORP. Summary of Operations Quarter Ended Sept. 30, 1992 (Dollars in thousands, except per share) Quarter ended Sept. 30 1992 1991 Net interest income $24,944 $25,224 Loan loss provision 18,000 14,149 Net interest income after provision for loan loss 6,944 11,075 Other income 6,763 6,468 Other expenses 31,203 24,989 Loss before income tax (17,496) (7,446) Income tax -0- 626 Net loss $ (17,496) (8,072) Earnings per common share: Net loss $ (1.73) (.80) Cash dividends declared per share -0- .15 Weighted average common shares 10,136,898 10,101,701 Nine months ended Sept. 30 1992 1991 Net interest income $ 75,267 76,000 Loan loss provision 42,500 27,097 Net interest income after provision for loan loss 32,767 48,903 Other income 26,241 19,562 Other expenses 90,827 71,984 Loss before income tax (31,819) (3,519) Income tax (benefit) -0- (329) Net loss before cumulative effect of accounting change (31,819) (3,190) Cumulative effect of accounting change -0- 4,342(A) Net income (loss) after cumulative effect of accounting change $ (31,819) 1,152 Earnings per common share: Net loss before cumulative effect of accounting change $ (3.14) (.32) Net income (loss) after cumulative effect of accounting change (3.14) .11 Cash dividends declared per share -0- .71 Weighted average common shares 10,134,328 10,066,660
(A) Cumulative effect on prior periods of accounting change for income taxes.
(Dollars in millions) Sept. 30, 1992 Dec. 31, 1991 Sept. 30, 1991 Loans, net $1,849 1,889 1,946 Deposits 2,247 2,499 2,576 Stockholders' equity $ 133 164 200 Selected ratios: Allowance for loan loss as a percentage of loans, net (pct.) 4.27 3.69 2.80 Loans to deposits (pct.) 82.26 75.57 75.54 Equity to assets (pct.) 5.38 5.91 6.90 Capital ratios at Sept. 30, 1992 First Eastern Corp. First Eastern Bank,N.A Minimum (Consolidated) (Bank Subsidiary) Tier I (pct.) 4 6.74 6.06 Total capital (pct.) 8 8.03 7.35 Leverage ratio (pct.) 3-5 5.03 4.51 /delval/ -0- 10/21/92 /CONTACT: Tony Cusatis, public relations officer of First Eastern Bank, 717-821-3211/ (FEBC) CO: First Eastern Corp. ST: Pennsylvania IN: FIN SU: ERN
MP -- PH038 -- 2940 10/21/92 13:32 EDT
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|Date:||Oct 21, 1992|
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