Printer Friendly

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

 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
 KALAMAZOO, Mich., Oct. 14 /PRNewswire/ -- First of America Bank Corporation (NYSE: FOA) today reported record third quarter earnings of $57.7 million, or $.97 per fully diluted share, up 33.5 percent from $43.2 million, or $.73 per share, earned for the same period last year. Return on average assets was 1.17 percent versus 1.03 percent and return on average total equity was 17.35 percent compared with 14.06 percent a year ago. Both ratios are among the highest ever reported by First of America.
 On a year-to-date basis, net income for 1992 was $134.4 million versus $120.5 million for 1991. Included in 1992's net income were $23.9 million of one-time charges directly attributable to First of America's acquisition and assimilation of Security Bancorp, Inc. Excluding these one-time charges, net income for 1992 versus 1991 would have increased 31.5 percent and fully diluted earnings per share would have been $2.66, 31.0 percent higher than 1991's $2.03 per share.
 Total assets were $19.9 billion at September 30, 1992, compared with $17.2 billion a year ago, largely the result of the acquisition of Champion Federal Savings & Loan Association on December 31, 1991. Total loans increased 19.3 percent to $13.6 billion and total deposits grew 15.6 percent to $17.8 billion.
 Daniel R. Smith, chairman and chief executive officer, First of America Bank Corporation, observed, "The record results reported for the third quarter reflect the success of our ongoing operating consolidations and efficiency enhancements, as well as the benefits we are starting to realize from our recent acquisitions of Champion and Security.
 "Earnings for the quarter were strong." Smith continued, "Our consolidated net interest margin was 5.00 percent for the quarter. While that is lower than last year's 5.12 percent as a result of the 24 basis point impact that Champion, a thrift organization, had on this ratio, we are pleased that our bank affiliates averaged a net interest margin of 5.24 percent for the quarter. Fee income, as a percent of average assets, continued its upward trend and our burden ratio improved.
 "Security and Champion played an important part in the quarter's success." Smith noted, "Security's credit card portfolio boosted our consolidated net interest margin while Champion added to our earnings per share."
 "It is important to note," Smith concluded, "that our third quarter earnings per share of $.97 were 11.5 percent higher than the $.87 per share reported for the third quarter of 1991 on an originally reported basis. When we announced our intent to acquire Security last year, we expected full year 1992 earnings to be slightly less than $3.00 per share because of the one-time charges and modest dilution from the stock acquisition of Security. Now, based on the third quarter's strong performance, we are confident that earnings per share, even with these one-time charges, will exceed $3.00 per share on an ongoing operating basis."
 INCOME ANALYSIS
 Net interest income increased to $222.7 million for the third quarter, up 16.9 percent from $190.5 million a year ago. For the 1992 year-to-date period, net interest income increased 17.1 percent over 1991.
 "While measures of consumer confidence have lagged actual economic progress in 1992," Richard F. Chormann, president and chief operating officer, First of America Bank Corporation, stated, "we have experienced consumer loan growth, and total loans were up 6.2 percent from a year ago, excluding the effect of acquisitions, with most of the activity in residential mortgages and consumer loans."
 Non-interest income was $67.8 million for the third quarter, a 28.9 percent increase over $52.6 million last year. On a year-to-date basis, non-interest income was up 24.1 percent to $191.5 million from $154.3 million a year ago. Gains on the sales of investment securities made up $4.5 million of the quarter's non-interest income and $10.7 million on a year-to-date basis. Without such gains non-interest income would have increased 17.7 percent for the year.
 "Our strategies to increase fee income emphasize lines of business which have traditionally been part of our banking business -- credit cards, residential mortgage originations and financial services." Chormann commented, "The impact of mortgage banking activities continued to grow. Gains on the sale of mortgages totaled $3.8 million for the third quarter and $8.8 million year-to-date. For the same periods, mortgage servicing added $0.7 million and $2.7 million, respectively, to fee income."
 OPERATING EFFICIENCIES
 Chormann continued, "Since 1988 First of America has expended resources and manpower for company-wide system conversions, in-market mergers and functional consolidations to streamline operations. The benefits of these investments have begun to be realized. The efficiency ratio, on a quarter and year-to-date basis, was 62.81 percent and 67.94 percent, respectively, for 1992, compared with 67.08 percent and 67.48 percent in 1991. Excluding 1992's one-time merger costs, the efficiency ratio would have been 64.51 percent year-to-date. In 1988 the efficiency ratio was 67.11 percent, on an originally reported basis, demonstrating the real progress we have made."
 Non-interest expense was $186.2 million for the third quarter of 1992 compared with $167.8 million for the same 1991 period. As a percent of average assets, non-interest expense was 3.77 percent compared with 3.99 percent a year ago. The burden ratio continued to improve declining to 2.40 percent for 1992's third quarter versus 2.74 percent a year ago.
 ASSET QUALITY
 Asset quality remained stable during the third quarter. Non- performing assets as a percent of total assets were 0.90 percent at September 30, 1992, compared with 0.84 percent last year. Net charge-offs for the 1992 third quarter, annualized, were 0.58 percent of average loans versus 0.43 percent for the same 1991 period. The allowance coverage of non-performing loans at September 30, 1992, was 129 percent, up from 119 percent at September 30, 1991.
 Thomas W. Lambert, executive vice president, chief financial officer and treasurer, First of America Bank Corporation, noted, "During this past year and a half, economic progress has been slower than expected during a recovery. First of America's asset quality meanwhile has remained among the best in the industry. Our community banking philosophy, combined with conservative lending practices, has made this possible."
 OUTLOOK
 "During the upcoming fourth quarter, we expect that the same factors -- operating efficiencies, increasing fee income and a strong net interest margin -- will continue to produce improving operating earnings." Lambert commented, "Along with all U.S. businesses, First of America faces some required accounting changes in the coming months. Before year-end, we expect to recognize a liability for retiree health care benefits and implement a required change in accounting for income taxes. These are non-cash transactions and will have no impact on the ongoing operating earnings of the company, but would result in reductions of reported earnings. Furthermore, during the fourth quarter First of America will consider a possible acceleration of amortization on goodwill and/or other intangibles. Such a change would also reduce reported results but would not impact negatively the company's ongoing earnings.
 "This has been a successful quarter for First of America with a record net income and return on average assets." Lambert continued, "As our operating efficiencies continue to be realized and Security and Champion are integrated further into our company, we expect to continue our progress towards returning to our long term trend of an 11 percent compound growth in earnings per share, on an originally reported basis and towards our 1.20 percent return on assets and 17 percent return on equity goals for 1993."
 First of America Bank Corporation, headquartered in Kalamazoo, is one of the largest bank holding companies in the Midwest with assets exceeding $19 billion. First of America has 566 offices in Michigan, Indiana and Illinois that serve over 300 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 35 banking companies in the United States.
 -0- 10/14/92
 /CONTACT: Samuel G. Stone, Vice President, Director of Corporate Planning, 616-376-7008, Jennifer D. Cox, Financial Reporting Manager, 616-376-7115, or Martha Melone, Public Relations Specialist, 616-376-7287, all of First of America; or Heather Wietzel, Vice President, The Financial Relations Board, 312-266-7800, for First of America/
 (FOA) CO: First of America Bank Corporation ST: Michigan IN: FIN SU: ERN


ML -- DE005 -- 9693 10/14/92 08:58 EDT
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:Oct 14, 1992
Words:1463
Previous Article:GEORGIA REGIONAL STOCK REPORT FOR TUESDAY, OCT. 13
Next Article:DIEBOLD'S 1992 THIRD-QUARTER AND NINE-MONTH EARNINGS INCREASE
Topics:


Related Articles
FIRST OF AMERICA BANK CORP. REPORTS RECORD EARNINGS FOR 1991; 4TH QUARTER EPS AT 86 CENTS, FULL YEAR, $3.24; FOUNDATION YEAR GOALS MET
F&M NATIONAL CORPORATION REPORTS NINE MONTH EARNINGS
F&M NATIONAL CORPORATION REPORTS NINE MONTH EARNINGS
F&M NATIONAL CORPORATION REPORTS NINE MONTH EARNINGS
FULTON FINANCIAL CORP. REPORTS RECORD EARNINGS
CULLEN/FROST REPORTS FIRST QUARTER EARNINGS
FIRST OF AMERICA BANK CORP. REPORTS 2ND QUARTER EPS OF $1.00; FEE INCOME UP 13 PERCENT; AND A RETURN ON ASSETS OF 1.17 PERCENT
BANKERS TRUST EARNINGS RISE 87 PERCENT TO RECORD $310 MILLION
1ST SOURCE REPORTS INCREASED EARNINGS FOR THE THIRD QUARTER OF 1993
First of America Bank Corp. Reports 2nd Qtr Results: Earnings of $0.82 Per Share Up 22.4% From A Year Ago

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