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 FALLS CHURCH, Va., Oct. 12 /PRNewswire/ -- First Virginia Banks, Inc. (NYSE: FVB) has announced an increase in its third quarter earnings of 11 percent as compared to the third quarter of 1992. Net income in the third quarter equaled $28,523,000 or $.88 per share, as compared to the $25,606,000 or $.79 per share reported in the previous year's third quarter. Annualized, these results produced a return on average assets of 1.65 percent and a return on average equity of 17.23 percent placing First Virginia near the top of all banks in the country. Net income would have reached a record amount for the ninth consecutive quarter had it not been for the recently enacted retroactive increase in the federal corporate income tax rate which required the company to record a net of two cents in additional income tax expense in the third quarter.
 For the first nine months of 1993, net income of $87,035,000 or $2.68 per share represented an increase of 23 percent over the $70,931,000 or $2.20 per share earned in the first nine months of 1992. These earnings yielded a return on average stockholders' equity of 18.09 percent and a return on average assets of 1.70 percent, as compared to the 16.79 percent and 1.47 percent, respectively, reported in the comparable period of 1992.
 Robert H. Zalokar, chairman and chief executive officer, said that the maintenance of the net interest margin at a high level and the low level of loan charge-offs were key factors producing the increase in net income. He noted that average loans are up 9 percent to $4.039 billion in the first nine months of 1993. Mr. Zalokar said, "Consumer automobile lending has been particularly strong and is up 28 percent compared to 1992. This growth has been seen throughout the three state region in which the company operates and is a result of efforts to increase the already strong presence that First Virginia has in the indirect automobile financing area." He also noted that real estate lending has been strong as consumers refinance to take advantage of the lowest rates in over twenty years.
 Total assets at Sept. 30, 1993, were $6.975 billion, up 5 percent from the $6.666 billion reported in the previous year and have exceeded $7 billion several times during the quarter. Deposits increased 4 percent to $6.062 billion, as compared to $5.849 billion in the previous year despite the low level of interest rates which has induced some consumers to non-traditional banking products for higher yields. The corporation has been offering a combination of alternative products including annuities, discount brokerage services and a mutual fund asset allocation package. In addition, its trust services have increased revenue 20 percent compared to the prior year's third quarter and assets under management exceeded $1 billion for the first time.
 The quality of the corporation's loan portfolio, which was already one of the best in the country, continued to improve. Nonperforming loans as of Sept. 30, 1993 were down 4 percent and totaled $29,116,000 or .72 percent of loans, compared to the $30,456,000 or .81 percent of loans, in the previous year's third quarter. Loans past due 90 days or more and still accruing interest were down 57 percent to $3.638 million and represented only .09 percent of outstanding loans. Annualized net charge-offs in the third quarter amounted to .10 percent of average loans and were down 65 percent compared to the previous year's third quarter and were down 60 percent to .13 percent of average loans for the first nine months of 1993.
 Stockholders' equity increased 14 percent compared to Sept. 30, 1992, and totaled $671.769 million, and the Tier 1 Leverage ratio was 9.50 percent, compared to 8.77 percent in the previous year, and was 3.2 times greater than the required regulatory minimum. The corporation has increased the quarterly dividend rate for 17 consecutive years and through the end of 1992 had increased the dividend rate twice per year for 11 consecutive years.
 Currently, there are 21 member banks in the First Virginia Banks, Inc. group and they operate 324 offices. Sixteen of the banks with 267 offices are in Virginia; two banks with 37 offices are in Maryland; and three banks with 20 offices are in Tennessee.
 Financial Data
 (Dollars in thousands, except per share data)
 Period ended Three Months Nine Months
 Sept. 30, 1993 1992 1993 1992
 Interest income $ 126,742 $ 131,405 $ 380,762 $ 394,719
 Interest expense 41,710 49,715 124,907 159,823
 Net interest income 85,032 81,690 255,855 234,896
 Provision for loan losses 820 3,505 5,034 13,163
 Other income 20,802 19,301 60,452 56,991
 Other expenses 62,452 60,102 183,375 176,247
 Provision for inc. taxes 14,039 11,778 40,863 31,546
 Net income 28,523 $ 25,606 $ 87,035 $ 70,931
 Net income
 per common share $ .88 $ .79 $ 2.68 $ 2.20
 Earnings per share of common stock for the nine months ended Sept. 30, after giving effect to dividends on preferred stock of $40,000 in 1993 and $47,000 in 1992, are based on 32,504,000 and 32,271,000 average shares outstanding, respectively. Prior quarters of 1993 have been restated to reflect the acquisition of United Southern Bank of Morristown, Tennessee. Because the restatement would not have had a material effect upon the Corporation's financial statements, the accounts of United Southern Bank have not been retroactively reflected in periods prior to 1993.
 Average earning assets 6,403,203 $6,125,997 $6,327,179 $5,970,031
 Yield on earning assets
 (in percents) 8.02 8.70 8.16 8.96
 Avg time dpsts
 and brwd funds 5,199,109 5,064,112 5,171,969 4,961,988
 Average interest cost
 (in percents) 3.18 3.91 3.23 4.30
 Net yield on earning assets
 (in percents) 5.43 5.48 5.53 5.39
 Average assets 6,919,389 6,586,481 6,846,883 6,439,845
 Return on average assets
 (in percents) 1.65 1.56 1.70 1.47
 Average stockholders'
 equity 662,025 579,736 641,674 563,415
 Return on average equity
 (in percents) 17.23 17.67 18.09 16.79
 As Of Sept. 30: 1993 1992
 Total assets $6,974,514 $6,665,593
 Demand deposits 1,020,253 918,311
 Savings and time
 deposits 5,041,853 4,930,923
 Total deposits 6,062,106 5,849,234
 Loans (net) 3,988,222 3,706,417
 Stockholders' equity 671,769 588,614
 Book value per share 20.70 18.27
 -0- 10/12/93
 /CONTACT: Richard F. Bowman of First Virginia Banks, 703-241-3685/

CO: First Virginia Banks, Inc. ST: Virginia IN: FIN SU: ERN

MP -- NY047 -- 1068 10/12/93 11:56 EDT
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Publication:PR Newswire
Date:Oct 12, 1993

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