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FOURTH FINANCIAL CORPORATION REPORTS RECORD FIRST QUARTER OPERATING EARNINGS

 WICHITA, Kan., April 14 /PRNewswire/ -- Citing increased operating revenues and a lower provision for credit losses, Fourth Financial Corporation (NASDAQ: FRTH) today announced income from ongoing operations in the first quarter of 1993 rose 85 percent from originally reported results in the first quarter of 1992 and 54 percent from restated first quarter 1992 results. Darrell G. Knudson, chairman and CEO of Fourth Financial Corporation, said the record earnings reflected the benefits from recent acquisitions, improved credit quality, and focused sales activities.
 Financial Accounting Standard No. 109 - Accounting for Income Taxes was implemented during the current quarter, resulting in a $10.6 million nonoperating gain. Also during the quarter, a $6.2 million nonoperating charge was taken for the acceleration of core deposit intangible amortization relative to deposits previously acquired from the Resolution Trust Corporation (RTC), acceleration of data processing hardware and software depreciation, and other restructuring charges associated with current-year acquisitions. Including the nonoperating gain and charges, net income was $22.2 million and fully diluted earnings per share were 86 cents; however, income from ongoing operations was $16.1 million and 63 cents per share (fully diluted). As originally reported, net income for the first quarter of 1992 was $8.7 million and fully diluted earnings per share were 43 cents. Adjusted for the effects of pooling of interests acquisitions, net income for the first quarter of 1992 was $10.5 million and fully diluted earnings per share were 44 cents.
 Based upon income from ongoing operations, return on assets for the first quarter of 1993 was 1.25 percent and return on common equity was 15.64 percent. Adjusted to include the FAS No. 109 gain and the nonoperating charges, return on assets and return on common equity were 1.71 percent and 22.16 percent, respectively. For the first quarter of the prior year, return on assets was 0.88 percent and return on common equity was 11.68 percent.
 "The nonoperating charge was primarily the result of the continuing trend of faster than anticipated runoff of deposits previously assumed from the RTC due to the low interest rate environment and the desire to enhance the delivery of services to customers through improved technology," said Knudson. "The effect of the current-period nonoperating charge will be to lower future depreciation and amortization expenses and strengthen future earnings."
 PROFIT IMPROVEMENT
 For the first quarter of 1993, net interest income totaled $51.9 million, an increase of 15.0 percent from $45.1 million in the first quarter of 1992, reflecting sharply lower interest expense. The net yield on earning assets was 4.61 percent for the quarter vs. 4.42 percent for the year-ago quarter. Fees on loans were $1.6 million for the current quarter compared to $1.0 million for the prior year, as the strong demand continued for new and refinanced residential mortgages.
 The high quality of the company's loan portfolio is reflected in a significant decrease in the provision for credit losses for the quarter, Knudson said. The provision was $2.0 million in the first quarter, down from $3.2 million in the fourth quarter of 1992 and $5.7 million in the first quarter of 1992.
 Fees for brokerage and annuity accounts and service charges on deposits contributed to a 15.7 percent increase in noninterest income. For the first quarter of 1993, noninterest income was $20.3 million vs. $17.6 million for the first quarter of 1992. Service charges on deposits for the quarter were $6.0 million, up 21.8 percent from $4.9 million in the year-ago quarter. Discount brokerage and annuity fees doubled, reaching $1.5 million compared to $775,000 last year. Trust and bank card fees increased 5.4 percent and 16.3 percent, respectively.
 Noninterest expense was $54.8 million for the first quarter of 1993. Excluding the $6.2 million nonoperating charge, expenses were $48.6 million compared to $43.6 million for the first quarter of 1992. The company's efficiency ratio was 65.45 percent for the current-year quarter compared to 66.54 percent reported for the first quarter of 1992.
 "Aggressive marketing programs for BANK IV in Kansas and Oklahoma are paying off in terms of sales of more products and services, and higher name recognition in new markets," said Knudson. "Our cross-sell ratio in Kansas reached 2.2, up from only 1.3 less than two years ago, and BANK IV's name recognition in Tulsa went from 5 percent to 49 percent in three months and is still growing."
 ACQUISITIONS
 Acquisitions completed and pending year-to-date will account for approximately $968 million in additional assets, the company reported. Fourth Financial completed the acquisition of a $65 million bank and $60 million in core deposits of a failed bank in metropolitan Kansas City. Pending acquisitions are a $62 million bank in Derby (suburban Wichita), an $80 million bank in Tulsa, a $101 million bank in Oklahoma City, a $468 million four-bank holding company in northeastern Oklahoma, and a $132 million two-bank holding company in western Oklahoma.
 COMPARATIVE BALANCE SHEET
 Total assets at March 31, 1993, were $5.46 billion, compared to $5.68 billion at Dec. 31, 1992, and $4.97 billion at March 31, 1992.
 Total loans were $2.25 billion at March 31, 1993, $2.26 billion at Dec. 31, 1992 and $2.32 billion at March 31, 1992. Although the loan climate seems to be improving, said Knudson, the results are not expected to be seen until the economy strengthens further.
 Total deposits were $4.31 billion, $4.57 billion and $4.19 billion at March 31, 1993, Dec. 31, 1992, and March 31, 1992, respectively, reflecting continued movement out of deposit accounts due to the low interest rate environment. The company noted that sales of alternative investment products, including annuities, mutual funds and discount brokerage services, are increasing significantly as both new and existing customers seek higher rates of return.
 Fourth Financial maintains a strong capital position. Stockholders' equity at March 31, 1993, was $485.6 million, or 8.89 percent of total assets. Book value per share at the end of the first quarter of 1993 was $17.24, up from $15.56 at the end of the first quarter of 1992. The company's leverage capital ratio of 8.33 percent and its risk-based capital ratio of 15.82 percent greatly exceed regulatory minimums of 3.00 percent and 8.00 percent, respectively.
 CREDIT QUALITY
 Nonperforming assets were $40.3 million at March 31, 1993, compared to
$41.8 at Dec. 31, 1992 and $74.1 million at March 31, 1992. The current total includes $17.9 million associated with acquisitions during the last 12 months. Nonperforming loans were $25.5 million at March 31, 1993, $25.8 million at Dec. 31, 1992, and $50.1 million at March 31, 1992. Net charge-offs in the quarter were $0.8 million, compared to the provision for credit losses of $2.0 million. The company's very disciplined due diligence process on acquisitions has contributed to controlling increases in nonperforming assets from the acquired banks, Knudson said.
 The allowance for credit losses at March 31, 1993, was $64.2 million or 159.22 percent of nonperforming assets and 251.99 percent of nonperforming loans. This compares to $63.0 million at Dec. 31, 1992, or 150.86 percent and 244.70 percent, and $61.7 million at March 31, 1992, or 83.25 percent and 123.06 percent. Net charge-offs were 0.15 percent of loans for the first quarter of 1993 and 0.87 percent for the first quarter of 1992. Fourth Financial also benefited from a $554,000 decrease in net costs of other real estate and nonperforming assets due to a reduced volume of such assets.
 OUTLOOK
 "Fourth Financial is very pleased with the continuation of its earnings momentum in 1993 as both net interest income and fee income increased while operations became more efficient," said Knudson. "The revenue stream will benefit from off-balance sheet items like mutual funds, annuities and discount brokerage. We have allocated resources to expand these operations as well as trust services. Mortgage loan applications in process of $100 million will still be a significant contributor to revenues, especially in light of continuing low home mortgage rates."
 Fourth Financial Corporation is a Wichita-based bank holding company with consolidated assets of $5.5 billion. The company currently operates 79 offices in 31 Kansas communities through its BANK IV Kansas subsidiary and 16 offices in Tulsa through its BANK IV Oklahoma subsidiary. The BANK IV banks provide a full line of banking and financial services for consumers, agriculture, small businesses and mid- to large-sized companies. Fourth Financial's common stock and depositary shares are traded on the NASDAQ national market system under the symbols "FRTH" and "FRTHZ," respectively.
 -0- 4/14/93
 /CONTACT: Michael J. Shonka, CFO, Investment Inquiries 316-261-4510 or R. Brent Thompson, senior vice president-marketing, General Media Inquiries 316-261-4403, both of Fourth Financial Corp./
 (FRTH)


CO: Fourth Financial Corporation ST: Kansas IN: FIN SU: ERN

LR -- NY074 -- 5784 04/14/93 14:02 EDT
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Date:Apr 14, 1993
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