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FLEET FINANCIAL GROUP REPORTS SECOND QUARTER EARNINGS OF $71 MILLION; NONPERFORMING ASSETS REDUCED BY $86 MILLION

 FLEET FINANCIAL GROUP REPORTS SECOND QUARTER EARNINGS
 OF $71 MILLION; NONPERFORMING ASSETS REDUCED BY $86 MILLION
 PROVIDENCE, R.I., July 15 /PRNewswire/ -- Fleet Financial Group (NYSE: FLT) today reported net income of $71 million, or 45 cents per fully diluted share, for the quarter ended June 30, compared to $28 million, or 23 cents per fully diluted share, in the second quarter of 1991. In addition, during the quarter, nonperforming assets were reduced $86 million.
 For the first six months of 1992, net income was $121 million, or 76 cents per fully diluted share, compared to $53 million, or 44 cents per fully diluted share, for the first half of 1991.
 Terrence Murray, chairman of chief executive officer, said that "second quarter results were particularly encouraging as Fleet was able to continue its momentum in both returning earnings to more historical levels as well as reducing nonperforming assets. Nevertheless, given the fact that there is still uncertainty about the strength of the Northeastern economy, we chose to further strengthen our credit loss reserves." Reserves were increased by over $40 million in the quarter to $1.062 billion.
 Murray noted that an improved net interest margin was a major contributor to the improvement in earnings. "A year ago, our net interest margin was just under 4 percent, while, during the second quarter, the margin increased to 4.82 percent."
 Second quarter results contain $55 million of securities gains, compared to $24 million in the same period of 1991. In addition to the $41 million increase in credit loss reserves, Fleet added $9 million to reserves at AFSA Data Corp., its student loan processing subsidiary.
 Murray said he is optimistic about Fleet's prospects during the remaining half of 1992. "Nonperforming assets are expected to continue their decline, and the prospects for earnings are encouraging," he said. Earnings By Group
 The New England Banking Group, aided by securities gains at Fleet Bank of Massachusetts, earned $35 million in the second quarter, up significantly from $12 million in the previous quarter and a loss of $29 million in the second quarter of 1991. A major factor in the $64 million improvement from 1991 to 1992 was the acquisition of the former Bank of New England (BNE) banks in Massachusetts, Connecticut and Maine. Murray said that Fleet's conversion and absorption of the former BNE banking franchise is progressing well and will be completed, as planned, by year's end.
 Fleet's New York Banking Group earned $28 million, a 36 percent increase over its first quarter contribution and 80 percent greater than the $15 million earned in 1991. The upstate New York bank (representing the Albany and Buffalo banks, which will merge in September) contributed $33 million to the corporation's second quarter earnings, a $6 million improvement for 1991's level.
 Fleet's Long Island-based bank, although continuing to be negatively affected by the poor economy, sustained a smaller loss in the second quarter than in the prior quarter, as asset quality showed improvement.
 Second quarter earnings of the Financial Services Group were $31 million. Fleet Mortgage Group, the corporation's mortgage banking operation, performed particularly well in 1992, earning $29 million during the second quarter, including a $5 million (after-tax) gain on the sale of mortgage servicing rights. Net Income Summary
 Net interest income on a fully taxable equivalent basis totaled $490 million for the second quarter of 1992, compared to $291 million for the comparable period in 1991. The net interest margin was 4.82 percent vs. 3.97 percent for the second quarter of 1991. Factors responsible for the increase in net interest income and margin were the increased volume as a result of the BNE acquisition, a higher spread between interest- earning assets and interest-bearing liabilities as a result of aggressive repricing of liabilities.
 The provision for credit losses in the second quarter of 1992 was $129 million, compared to $115 million in the second quarter of 1991. Net chargeoffs for the second quarter were $98 million compared to $94 million in 1991's second quarter.
 Noninterest income in the second quarter totaled $330 million, a 45 percent increase in over the $228 million reported for the comparable period in 1991. The increase is primarily attributable to the impact of the BNE acquisition. The largest component of noninterest income was mortgage banking income, which totaled $104 million for the second quarter of 1992, compared to $95 million for the second quarter of 1991. Increases in mortgage production and servicing revenue, a result of the current lower interest rate environment, more than offset a reduction in gains from the sale of servicing which totaled $22.5 million in 1991 and $8.5 million in 1992.
 Noninterest expense for the second quarter of 1992 totaled $562 million, compared to the $354 million reported for the same period in 1991 and $543 million in the first quarter of 1992. The major factors in the year-to-year increase were increased activity in the mortgage group and expenses related to acquired subsidiaries. Asset Quality
 Nonperforming assets were reduced $86 million during the quarter, and at June 30, 1992 totaled $1.515 billion or 5.6 percent of total loans, leases and OREO, compared to $1.505 billion or 7.2 percent at June 30, 1991. At March 31, 1992, nonperforming assets totaled $1.6 billion, or 5.8 percent of total loans, leases, and OREO (1991 figures reflect balances prior to the BNE acquisition.)
 Credit loss reserves totaled $1.062 billion as of June 30, 1992, vs. $1.021 billion on March 31, 1992, and $749 million at June 30, 1991. Net chargeoffs during the quarter totaled $98 million, compared to $111 million in the first quarter and $94 million during the second quarter of 1991. Balance Sheet
 Total assets at June 30, 1992 and March 31, 1992, were $45 billion, and $32 billion at June 30, 1991. Total loans and leases were $27 billion at June 30,1992, and March 31, 1992, and $20 billion at June 30, 1991. (1991 figures reflect balances prior to the BNE acquisition.)
 Including dual convertible preferred stock, Fleet Financial Group's equity was $2.9 billion and its equity to assets ratio as of June 30 was 6.48 percent. The corporation's tier one risk-based capital ratio was approximately 10.5 percent, compared to 9.4 percent in 1991 and a minimum regulatory requirement of 4 percent.
 Fleet Financial Group is a diversified financial services company listed on the New York Stock Exchange with approximately 1,300 offices nationwide. Its lines of business include commercial and consumer banking, mortgage banking, consumer finance, asset-based lending, 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- 7/15/92
 /CONTACT: Robert W. Lougee, Jr., 401-278-5879, Bruce P. Crooks, 401-278-6241, (media) Thomas L. Lavelle, 401-278-3003, or (investor) Judith B. Ragge, 401-278-6444/
 (FLT) CO: Fleet Financial Group ST: Rhode Island IN: FIN SU: ERN


CN -- NE010 -- 9533 07/15/92 12:14 EDT
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