Printer Friendly

FIRST OF AMERICA BANK CORP. REPORTS RECORD EARNINGS FOR 1991; 4TH QUARTER EPS AT 86 CENTS, FULL YEAR, $3.24; FOUNDATION YEAR GOALS MET

 FIRST OF AMERICA BANK CORP. REPORTS RECORD EARNINGS FOR 1991; 4TH QUARTER EPS AT 86 CENTS, FULL YEAR, $3.24; FOUNDATION YEAR GOALS MET
 KALAMAZOO, Mich., Jan. 20 /PRNewswire/ -- First of America Bank Corporation (NYSE: FOA) today reported 1991 fourth quarter net income of $36 million compared with $34 million last year. On a fully diluted basis, net income per share increased 6 percent to 86 cents compared with 81 cents per share a year ago. These results produced returns on assets and total equity for the fourth quarter of 1.00 percent and 13.62 percent, respectively, as compared with 0.97 percent and 13.73 percent for the fourth quarter of 1990. Net income for full year 1991 was a record $135 million. Fully diluted earnings per share were $3.24 vs. $3.18, a 2 percent increase. Return on assets for 1991 and 1990 were 0.96 percent and 1.01 percent, while return on total equity for the same periods were 13.09 percent and 13.74 percent, respectively.
 Total assets for year-end 1991 reached $16.8 billion, up 19 percent from $14.0 billion at Dec. 31, 1990, mainly due to the acquisition of the $2.1 billion in assets Champion Federal Savings and Loan Association. Total loans were up 21 percent reaching $11.5 billion and deposits were up 20 percent to $15.0 billion.
 Daniel R. Smith, chairman and chief executive officer, First of America Bank Corporation, stated, "Over a year ago we recognized that 1991 represented an opportunity for us to build a strong foundation for future achievements. The forecast for the economy at the end of 1990 was uncertain and FDIC premiums were scheduled to rise materially. Therefore, we began a concerted effort to meet these challenges and, at the same time, to position First of America for future growth and profitability. We did. We enhanced our banking franchise through acquisitions, maintained our strong asset quality and accomplished operating efficiencies to be better prepared for competition in the changing financial services market."
 Acquisitions
 On Dec. 31, 1991, the acquisition of Champion Federal Savings and Loan Association was completed. Champion Federal, with $2.1 billion in assets, is headquartered in Bloomington, Ill., and has 31 branches located throughout the state. Smith indicated that, "This transaction provides significant opportunities for expanding our current customer base in Illinois and good prospects for adding to our non-interest income through an expanded mortgage originations operation."
 Asset Quality
 The national recession has been experienced less severely in the Midwest. Reductions in loan demand did lead to slower loan growth. A higher than normal rise in charge-offs presented challenges to the maintenance of strong asset quality. As Smith explained, "Our management experience during difficult times, combined with our community banking philosophy of gathering deposits and lending those deposits within the markets we serve, helped us maintain the quality of our loan portfolio. Our strong loan policies, diversified loan portfolio and continuous internal monitoring process gives us confidence that we have adequately provided for any additional losses that may occur in the future."
 Net charge-offs as a percent of average loans were 0.43 percent for the year, above last year's 0.36 percent but significantly lower than the industry as a whole. Allowance coverage of non-performing loans decreased to 122 percent from 146 percent last year. The ratio of the allowance for loan losses to total loans was 1.27 percent at Dec. 31, 1991, compared with 1.20 percent at Dec. 31, 1990.
 Expense Control and Income Improvement
 In order to make the community banking network as efficient as possible, First of America began in 1988 a systematic program of consolidating all support functions and merging bank subsidiaries. These consolidation efforts are beginning to give results. Efficiency and expense ratios, excluding FDIC premiums, both showed improvement over 1990's levels. Calculated excluding FDIC premiums, the efficiency ratio decreased to 64.63 percent in 1991 from 65.76 percent in 1990 and the burden ratio decreased to 2.47 percent from 2.50 percent for the same periods. A higher level of non-interest income contributed to the improvement.
 Richard F. Chormann, president and chief operating officer of First of America Bank Corporation indicated, "Expense control and efficiencies are
vital, but they are only half the picture. We have made solid progress in implementing a customer oriented marketing culture. Systems have been put in place to provide incentives for sales results and to monitor those results company-wide. For example, income from the Trust and Financial Services Division, which has 42 employees whose salaries are based on commissions, increased 18 percent to $58.6 million for 1991 from 1990's $49.5 million. Overall non-interest income increased 14 percent."
 Profitability Ratios
 First of America's return on average assets for 1991 was 0.96 percent compared with 1.01 percent for 1990 reflecting the company's emphasis on building a strong foundation for the future during a difficult economic period. The solid net interest margin and higher non-interest income levels achieved were partially offset by the overall increases in non-interest expense, due to higher FDIC premiums, and the planned rise in the provision for loan losses.
 Return on average total shareholders' equity was also lower for 1991 at 13.09 percent compared with 1990's 13.74 percent.
 Well Positioned for the Future
 A continual assessment of market needs in each of the regions it serves has allowed First of America to introduce and tailor its products to what customers want. According to Thomas W. Lambert, executive vice president and chief financial officer, First of America Bank Corporation, "Today's customers have more choices than ever before so why choose one bank over another? The added value of quality service, product selection and convenient locations are the only reasons. We listen carefully to our customers, actively participate in the communities we serve and continually evaluate our branch locations. Additionally, we have spent several years ensuring that our bankers have the time to concentrate on their customers and training -- not backroom operations -- so that customers end up with the type of loan or deposit products that match their needs."
 Lambert added that, "The net interest margin for 1991 rose to 4.92 percent, above last year's 4.84 percent. Through careful asset and liability management and the development of innovative loan and deposit products, First of America has been able to maintain an above average net interest margin even with the lower rate environment and with the three savings and loan associations it acquired during 1990 whose net interest margins were traditionally lower than commercial banks."
 Long-Term View
 Smith concluded, "1992 and the years ahead hold exciting opportunities and new challenges for First of America. The addition of Champion Federal, and our pending acquisition of Security Bancorp, Inc., a $2.8 billion holding company headquartered in Southgate, Mich., will broaden our distribution system and our customer base. Our systems, personnel and products are in place for in-market expansion and profitability."
 "First of America remains committed to its long term goals. Attaining a net interest margin of 5 percent, earnings per share growth of 11 percent, on an originally reported basis, and a return on assets of 1.20 percent or better are possible. The foundation set in place this year forms the basis for achieving these goals in the future."
 First of America Bank Corporation, headquartered in Kalamazoo, is one of the largest bank holding companies in the Midwest with assets of $16.8 billion at Dec. 31. On a pro forma basis, with its pending acquisition of Security Bancorp, Inc., assets would exceed $19 billion. First of America's 26 financial institutions have more than 480 offices in Michigan, Indiana and Illinois that serve over 300 Midwestern communities. The banks engage in commercial banking, retail banking and mortgage banking; and provide trust, financial data processing and other financial services. Based on net income, profitability and size of franchise, First of America is ranked among the top 40 banking companies in the United States.
 -0- 1/20/92
 /CONTACT: Thomas W. Lambert, executive vice president, chief financial officer and treasurer, 616-376-7002, or Jennifer D. Cox, financial reporting manager, 616-376-7115, both of First of America Bank Corporation; or Heather Wietzel, vice president of The Financial Relations Board, 312-266-7800, for First of America Bank Corporation/
 (FOA) CO: First of America Bank Corporation ST: Michigan IN: FIN SU: ERN


JG -- DE013 -- 1560 01/20/92 17:37 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jan 20, 1992
Words:1407
Previous Article:TREUHAND LAUNCHES WORLDWIDE ADVERTISING CAMPAIGN FOR THE SALE OF EAST GERMAN BUSINESS
Next Article:VIRGINIA'S $20.6 MILLION GENERAL OBLIGATION BONDS RATED 'AAA' BY FITCH -- FITCH FINANCIAL WIRE --
Topics:


Related Articles
FIRST COLONIAL ANNOUNCES 1991 RESULTS
EDGEMARK FINANCIAL REPORTS FOURTH QUARTER AND YEAR END EARNINGS
FIRST OF AMERICA BANK CORPORATION REPORTS SECOND-QUARTER EPS BEFORE ONE-TIME CHARGES UP 19 PERCENT TO 86 CENTS
FIRST FEDERAL REPORTS STRONG EARNINGS
FIRST OF AMERICA BANK CORPORATION REPORTS RECORD THIRD QUARTER EPS RISES 33 PERCENT TO 97 CENTS; AND EARNS RETURN ON ASSETS OF 1.17 PERCENT
INVESTORS SAVINGS CORP.'S THIRD QUARTER EARNINGS UP 67 PERCENT FROM PRIOR YEAR
FULTON FINANCIAL CORP. REPORTS RECORD EARNINGS
FIRST OF AMERICA BANK CORP. REPORTS STRONG 1992 OPERATING EARNINGS; IMPLEMENTS FAS 106 AND FAS 109; AND REDUCES UNAMORTIZED INTANGIBLES
NORTHBAY FINANCIAL RELEASES EARNINGS
FIRST OF AMERICA BANK CORP. REPORTS RECORD 1993 NET INCOME AND ROA 1.20%

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