FLEET FINANCIAL GROUP REPORTS 1992 EARNINGS OF $280 MILLION; NONPERFORMING ASSETS REDUCED $619 MILLION DURING YEAR
PROVIDENCE, R.I., Jan. 21 /PRNewswire/ -- Fleet Financial Group (NYSE: FLT) today reported 1992 earnings of $280 million, or $1.77 per fully diluted share, compared to $98 million, or 67 cents per fully diluted share, in 1991. Fourth quarter net income was $82 million, or 52 cents per fully diluted share, vs, $35 million, or 22 cents per fully diluted share, for the last three months of 1991. Terrence Murray, chairman and chief executive officer, said 1992 "turned out to be a much better year for Fleet than we expected going in, given the weak economic conditions when the year began." In addition to achieving a strong earnings rebound in 1992, Fleet succeeded in reducing nonperforming assets by $619 million, from $1.6 billion at year-end 1991 to $990 million at Dec. 31, 1992. Nonperforming assets declined below the $1 billion level for the first time since March 1990. Murray credited Fleet's recent bulk sale of problem assets, coupled with ongoing successful efforts to reduce nonperforming assets, for the significant reduction. Among other encouraging accomplishments in 1992, Fleet acquired $3.3 billion in deposits and $1.3 billion in loans of several failed banking institutions throughout its Northeast franchise and completed the assimilation of the former BNE banking franchise into the Fleet organization. Murray also noted that last year's successful public sale of approximately 19 percent of the stock of the corporation's mortgage banking unit, Fleet Mortgage Group, Inc., confirmed management's contention that the franchise itself was worth more than $1 billion. With mortgage originations exceeding expectations, due in part to falling interest rates, Fleet Mortgage continued to perform exceptionally well throughout 1992. The company contributed $100 million, up 30 percent from 1991, to Fleet Financial's 1992 earnings. "The past several years were difficult for this corporation, as they were for the entire banking industry, but we believe we have put the most serious difficulties behind us," Murray said. "Fleet has survived with its core strength, which I would describe as the significant earnings power of our franchise, intact. The future looks considerably brighter than it has for some time, and I believe Fleet is poised to begin generating earnings at levels more in line with our performance during the late 1980's." Common stock dividends, which were increased 12.5 percent with the January 1993 payment, amount to 90 cents per common share on an annualized basis. As previously announced, Fleet's 1992 results include two significant transactions: a gain of $121 million (pre-tax) in connection with the Fleet Mortgage initial public stock offering, and a special provision of $115 million (pre-tax) relating to the bulk sale of problem assets. By maintaining loss provisions at $486 million, the corporation actually increased loss reserves during the year (to $1.029 billion), even as nonperforming assets were reduced $619 million.
Earnings by Group
The New England Banking Group, which contributed $60 million to the corporation's fourth quarter earnings, generated net income of $151 million in 1992, compared to a loss of $72 million in 1991. Fleet's Massachusetts bank led the Group's 1992 results with earnings of $84 million, while the corporation's Connecticut and Maine banks contributed $68 million and $23 million, respectively, to 1992 results. Earnings at each of the New England banks were positively impacted by securities gains. The New York Banking Group earned $57 million in 1992, compared to $70 million in 1991. Impacted throughout the last two years by asset quality concerns, the Long Island bank significantly reduced its level of nonperforming assets. On the other hand, the Upstate bank was negatively impacted in the fourth quarter by the need to provide additional loan loss reserves, in addition to the effect of the problem asset bulk sale. The Financial Services Group earned $102 million last year, compared to $162 million in 1991. Fleet Mortgage, as noted earlier, contributed $100 million to earnings. Fleet Securities, Fleet Factors and Fleet Brokerage generated 1992 net income of $6 million, $4.5 million and $3 million, respectively, while Fleet Credit broke even. Losses were incurred in 1992 by Fleet Finance ($8 million) and AFSA Data ($4 million), with the former subsidiary being affected by both increased loan loss reserves and the $25 million cost of its 10-Point Program announced in Oct. 1992 to assist its mortgage customers.
Net Income Summary
Net interest income totaled $2 billion for 1992, compared to $1.4 billion for 1991. The net interest margin for 1992 was 4.80 percent (4.95 percent in the fourth quarter), versus 4.09 percent in 1991, reflecting a dramatic increase in the interest rate spread, primarily due to the repricing of liabilities and reduced levels of nonperforming assets. Credit loss provisions, as noted earlier, for 1992 were $486 million, compared to $509 million in 1991. 1992 net chargeoffs, including the effect of the bulk sale, amounted to $545 million, compared to $396 million in 1991. Noninterest income increased 29 percent in 1992 to $1.4 billion, primarily due to the $121 million gain on the partial sale of Fleet Mortgage Group and the inclusion of the BNE franchise for the entire year. Results for 1992 include $207 million of securities gains, compared to $173 million in 1991. Noninterest expense, including the nonrecurring provision for the sale of problem assets, totaled $2.4 billion, compared to the $1.8 billion reported for 1991. Once again, higher 1992 expenses primarily reflect the fact that the former Bank of New England banks were part of Fleet for all of 1992, as compared to approximately six months in 1991.
Total assets at Dec. 31, 1992 were $47 billion, while total loans and leases were $27 billion at the same date, compared to $45 billion and $27 billion, respectively, at Dec. 31, 1991. Fleet Financial Group's equity was $3 billion and its equity to assets ratio as of Dec. 31 was 6.41 percent. The corporation's tier one risk-based capital ratio was approximately 10.38 percent, compared to 9.77 percent at Dec. 31, 1991, and a regulatory minimum of 4 percent. Fleet Financial Group is a diversified financial services company listed on the New York Stock Exchange (NYSE: FLT) with approximately 1,100 offices nationwide. Its lines of business include commercial and consumer banking, mortgage banking, consumer finance, asset-based lending and leasing, investment management, and student loan processing. ---- NOTE TO EDITORS: Detailed financial schedules are available via fax or mail upon request to Fleet Corporate Communications, 401-278-6242. -0- 1/21/93 /CONTACT: Robert W. Lougee, Jr. 401-278-5879, Bruce P. Crooks, 401-278-6241, Thomas L. Lavelle, 401-278-3003, or Judith B. Ragge, 401-278-6444/ (FLT)
CO: Fleet Financial Group ST: IN: FIN SU:
DD -- NE013 -- 7455 01/21/93 13:22 EST
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|Date:||Jan 21, 1993|
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