FIRST EASTERN REPORTS RESULTS FOR SECOND QUARTER
FIRST EASTERN REPORTS RESULTS FOR SECOND QUARTER WILKES-BARRE, Pa., July 15 /PRNewswire/ -- First Eastern Corp.
(NASDAQ: FEBC) today reported a net loss of $7.6 million, or $.75 per share, for the second quarter ended June 30, 1992.
The net loss for the second quarter was primarily attributable to decisions to provide a reserve of $7 million against other real estate, and asset writedowns approximating $4 million. Commenting on these actions, Richard M. Ross, Jr., chairman, president and chief executive officer of First Eastern Corp. said, "We believe the reserve and the asset writedowns were necessary to complete a realistic evaluation of our credit quality problems. In particular, we have taken a very conservative approach to both the reserve and the asset writedowns, which reflect adjustments below fair market value. In short, these decisions are in keeping with the practical course we set for dealing with the impact of a challenging economy on northeast Pennsylvania, and should strategically position the company for the future." The company noted that its other real estate properties are expected to be sold eventually by experienced loan workout specialists in First Eastern's credit risk management department. Last year, the company reported net earnings of $6.1 million, or $.60 per share for the second quarter, and a loss of $34.3 million, or $3.40 per share, for all of 1991. Ross continued, "As we previously indicated, we did not expect our results to improve immediately. Nonetheless, it is important to note that First Eastern has made substantial progress in identifying problem assets, as evidenced by the fact that it was not necessary to record a large loan loss provision. Our efforts have been directed to having our provisions reflect the typical, inherent risks of loss associated with a loan portfolio." Ross went on to say, "Even though our current results continue to be affected adversely by our nonperforming assets and we do not anticipate a rapid recovery in our area's economy, we are cautiously optimistic about our performance in the second half for several reasons. First, because of our large community based franchise in northeast Pennsylvania, our net interest margin for the second quarter approximated 4.20 percent as compared to 3.98 percent in 1991. As a result, net interest income was relatively unchanged despite the continued impact on earnings of nonperforming assets. Additionally, First Eastern has done very well in maintaining strict control over operating expenses. Finally, we are still a sound company with adequate liquidity and capital ratios within regulatory guidelines. "In summary, I believe that unless economic conditions worsen and in view of the continuing profitability in our retail banking, trust, and capital markets areas, the strength of our core funding base, and the significant strides we have achieved in keeping operating expenses down, we should at least break even for the second half of the year," concluded Ross. First Eastern Corp. is a bank holding company headquartered in Wilkes-Barre. As of June 30, 1992, the company reported total assets exceeding $2.5 billion. Its principal subsidiary, First Eastern Bank, N.A. serves the northeast Pennsylvania market through 60 offices. The company also operates a number of other subsidiaries including First Eastern Equipment Leasing, First Eastern Brokerage Services, Dolphin & Bradbury Inc., First Eastern Investment Co., First Eastern Life Insurance Co., and First Eastern Realty Inc. FIRST EASTERN CORP. (Dollars in thousands, except per share) Quarter ended June 30 1992 1991(A) Income (loss) before cumulative effect of change in accounting principle $(7,648) 1,735 Net income (loss) after cumulative effect of change in accounting principle (7,648) 6,077 Per Share: Income (loss) before cumulative effect of change in accounting principle (.75) .17 Net income (loss) after cumulative effect of change in accounting principle $(.75) $.60 Six months ended June 30 1992 1991(A) Income (loss) before cumulative effect of change in accounting principle $(14,323) 4,882 Net income (loss) after cumulative effect of change in accounting principle (14,323) 9,224 Per Share: Income (loss) before cumulative effect of change in accounting principle (1.41) .49 Net income (loss) after cumulative effect of change in accounting principle $(1.41) $.92 (A) Cumulative effect of change in accounting for income taxes in 1991, $4,342, during the second quarter of 1991. /delval/ -0- 7/15/92 R /CONTACT: Tony Cusatis of First Eastern Bank, 717-821-3211/ (FEBC) CO: First Eastern Corp. ST: Pennsylvania IN: FIN SU: ERN
KD -- PH036 -- 9681 07/16/92 11:43 EDT
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|Date:||Jul 16, 1992|
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