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FIRST VIRGINIA REPORTS FOURTH CONSECUTIVE QUARTER OF RECORD EARNINGS -- UP 44 PERCENT

 FIRST VIRGINIA REPORTS FOURTH CONSECUTIVE QUARTER
 OF RECORD EARNINGS -- UP 44 PERCENT
 FALLS CHURCH, Va., July 8 /PRNewswire/ -- First Virginia Banks, Inc. (NYSE: FVB) has reported earnings in the second quarter ended June 30, 1992, of $23,804,000 or $1.11 per share, up 44 percent from the $16,477,000 or $.77 per share earned in the second quarter of 1991, and up 11 percent from the $21,521,000 or $1.00 per share earned in the first quarter of 1992. These earnings allowed the corporation to achieve a 16.91 percent return on average equity which was equal to a 1.46 percent return on average assets -- among the highest of all of the banks in the country.
 For the first six months of 1992, net income of $45,325,000 or $2.11 per share was up 37 percent over the $33,095,000 or $1.55 per share earned in the first half of 1991. The 1992 figures represent an annualized return on average equity of 16.33 percent and a 1.42 percent return on average assets. All figures are unadjusted for the three for two stock split declared by the board of directors in June which is to be paid in July.
 According to Chairman and Chief Executive Officer Robert H. Zalokar, "The continued strong growth in earnings is due to a widening of the net interest margin in the second quarter to 5.40 percent -- an increase of 35 basis points over 1991 and an increase of 10 basis points over the first quarter of 1992." Zalokar also noted that the 14 percent growth in assets in the second quarter was due directly to the strong 15 percent growth in deposits, as consumers, attracted by its safety and soundness, moved to First Virginia to take advantage of its strong capital position and its lack of asset quality problems which have affected other financial institutions in the corporation's market areas.
 Total assets at June 30, 1992, were $6.612 billion, up 14 percent from the $5.776 billion reported in the previous year. Deposits totaled $5.800 billion, up 15 percent from the $5.025 billion reported in 1991 and the $5.777 billion reported at the end of the first quarter of 1992. Deposit growth in recent months has occurred primarily in low-cost, fixed-rate savings accounts due to the reduction in interest rates in general and due to the concern of consumers over the direction of the economy and inflation.
 As of June 30, loans increased 6 percent over the prior year. The increase was primarily in the residential real estate and automobile loan areas -- two of the corporation's traditional lines of business. Mortgage activity was particularly strong in the first several months of 1992, although it has weakened slightly in recent months. Automobile lending began strengthening in the latter part of the first quarter and has continued to be strong as a result of the corporation's aggressive move to reduce rates to their lowest levels in 20 years.
 Nonperforming assets (nonaccruing and restructured loans and foreclosed real estate) continued to decline and were $31,699,000 or .86 percent at the end of the second quarter, down from $35,185,000 or .98 percent of total loans at the end of the first quarter and the $37,277,000 or 1.07 percent of loans at the end of the second quarter of 1991. Zalokar remarked that, "First Virginia's nonperforming assets are less than one third of the levels of similar southern regional banking organizations, because construction and commercial real estate loans account for less than 4 percent of our corporate loan portfolio."
 Annualized net charge-offs of .41 percent for the second quarter were unchanged from the second quarter of 1991; and for the first six months of 1992, annualized net charge-offs of .37 percent were up one basis point over the same period in 1991. The allowance for loan losses totaled $47.8 million or 1.29 percent of total loans at June 30, 1992, which is equal to 151 percent of nonperforming assets and 357 percent of the annualized net charge-offs for the first six months.
 Stockholders' equity increased 10 percent as compared to one year ago, and the ratio of total equity to total assets was 8.63 percent as compared to 8.95 percent one year ago. The corporation's Tier I Leverage Ratio was 8.56 percent at June 30, 1992, nearly three times the required regulatory minimum.
 Currently, there are 20 member banks in the First Virginia Banks, Inc. group, and they operate 318 offices. Sixteen of the banks with 266 offices are in Virginia; two banks with 36 offices are in Maryland, and two banks with 16 offices are in Tennessee.
 FIRST VIRGINIA BANKS, INC.
 Financial Data
 (Dollars in thousands, except per share data)
 Period ended Three months Six months
 June 30 1992 1991 1992 1991
 Interest income $133,566 $129,478 $263,314 $254,827
 Interest expense 53,819 66,116 110,108 131,862
 Net interest income 79,747 63,362 153,206 122,965
 Provision for loan losses 5,704 3,703 9,658 6,126
 Other income 19,328 17,547 37,690 34,493
 Other expenses 58,972 54,415 116,145 105,558
 Provision for income taxes 10,595 6,314 19,768 12,679
 Net income 23,804 16,477 45,325 33,095
 Net income per common share 1.11 0.77 2.11 1.55
 Earnings per share of common stock for the six months ended June 30, after giving effect to dividends on preferred stock of $34,000 in 1992 and $37,000 in 1991, are based on 21,477,000 and 21,367,000 average shares outstanding, respectively.
 Period ended Three months Six months
 June 30 1992 1991 1992 1991
 Average earnings
 assets(in thousands) $6,072,035 $5,198,444 $5,891,188 $5,086,734
 Yield on earning
 assets (in percent) 8.96 10.15 9.10 10.23
 Average time deposits
 and borrowed funds 5,042,496 4,307,408 4,910,364 4,214,821
 Average interest costs
 (in percent) 4.29 6.16 4.51 6.31
 Net yield on earning
 assets (in percent) 5.40 5.05 5.35 5.00
 Average assets 6,544,311 5,636,406 6,365,602 5,512,025
 Return on average assets
 (in percent) 1.46 1.17 1.42 1.20
 Average stockholders'
 equity 562,983 512,208 555,158 507,416
 Return on average equity
 (in percent) 16.91 12.87 16.33 13.04
 As of June 30 (in thousands):
 Total assets -- -- 6,611,554 5,775,572
 Demand deposits -- -- 899,450 794,562
 Savings and time deposits -- -- 4,900,203 4,230,623
 Total deposits -- -- 5,799,653 5,025,185
 Loans (net) -- -- 3,644,825 3,425,302
 Stockholders' equity -- -- 570,905 516,970
 Book value per share -- -- 26.60 24.16
 -0- 7/8/92
 /CONTACT: Richard F. Bowman of First Virginia Banks, 703-241-3685/
 (FVB) CO: First Virginia Banks, Inc. ST: Virginia IN: FIN SU: ERN


TQ-SO -- NY013 -- 7339 07/08/92 10:22 EDT
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