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FOURTH FINANCIAL CORPORATION REPORTS RECORD THIRD QUARTER EARNINGS

 WICHITA, Kan., Oct. 14 /PRNewswire/ -- Fourth Financial Corp. (NASDAQ: FRTH), the $6.5 billion Wichita-based bank holding company, today announced a record third quarter, attributing earnings gains to prior-year acquisitions, higher net interest income and improved credit quality. Earnings in the quarter rose 42 percent from originally reported results in the third quarter of 1992 and seven percent from third quarter 1992 results as restated for the effects of pooling of interests acquisitions, the company said.
 "This quarter's performance demonstrates that we are continuing to build earnings as we are increasing the asset size of the company," said Darrell G. Knudson, chairman and chief executive officer. "Including acquisitions accounted for both as poolings and purchases, Fourth Financial has added $2 billion in assets in the last year. Earnings have improved despite the substantial expenses related to making and completing acquisitions. At the same time, we continue to concentrate on improving the quality of our loan portfolio," Knudson said.
 For the quarter ended Sept. 30, 1993, net income was $18.8 million and fully diluted earnings per share were 67 cents. As originally reported, net income for the third quarter of 1992 was $13.2 million and fully diluted earnings per share were 58 cents. Restated for the effects of pooling interests acquisitions, net income for the 1992 third quarter was $17.5 million and fully diluted earnings per share were 63 cents.
 Net income for the nine months ended Sept. 30, 1993, totaled $56.1 million, or $1.99 per share. This compares to the originally reported $33.5 million, or $1.53 per share, net income for the first nine months of 1992 and the restated earnings of $48.4 million or $1.78 per share.
 Both nine-month periods included significant nonoperating income related to Financial Accounting Standard No. 109 -- Accounting for Income Taxes -- and nonoperating charges associated with acquisitions and other restructuring. The following tables reflect the impact of these nonoperating income and charges.
 NET INCOME (000s)
 Nine months ended Sept. 30
 Originally Restated 1992 for poolings
 1993 reported 1992 of interests acquisitions
 Income from ongoing
 operations $51,785 34,222 47,133
 Effect of FAS No. 109 10,509 --- 1,989
 Nonoperating charge
 after tax (6,198) (760) (760)
 Net Income 56,096 33,462 48,362
 PER FULLY DILUTED COMMON SHARE
 Nine months ended Sept. 30
 Originally Restated 1992 for poolings
 1993 reported 1992 of interests acquisitions
 Income from ongoing
 operations $1.84 1.56 1.74
 Effect of FAS No. 109 0.37 --- 0.07
 Nonoperating charge
 after tax (0.22) (0.03) (0.03)
 Net Income 1.99 1.53 1.78
 Return on assets (ROA) for the third quarter of 1993 was 1.16 percent and return on common equity (ROE) was 15.50 percent vs. 1.26 percent and 16.03 percent, respectively, for the 1992 period. For the latest nine-month period, ROA was 1.22 percent and ROE was 15.97 percent compared to 1.19 percent and 15.51, respectively, in the same period one year ago.
 Profit Improvement
 Net interest income in the third quarter of 1993 totaled $64.3 million on a fully taxable equivalent basis, representing an 8 percent increase from $59.5 million in the third quarter of 1992.
 "The favorable interest rate environment continues to contribute to our profitability," Knudson said. "However, several factors led to the third quarter decline in our net yield on earning assets to 4.39 percent from 4.74 percent in the third quarter a year ago."
 According to Knudson, the company has increased leverage associated with its purchase acquisitions and a higher net borrowed position. In addition, he said, prevailing low interest rates generated a high volume of loan refinancings nationwide, resulting in accelerated prepayments of Fourth Financial's mortgage-backed securities.
 The company's improved performance also reflects its sound asset quality and strong allowance for credit losses, according to Knudson. Fourth Financial's year-to-date provision for credit losses is $8.5 million lower than it was a year ago. Knudson said no provision was needed for the third quarter as the allowance for credit losses is deemed to be adequate relative to the level of nonperforming loans and other measures of credit quality.
 Noninterest income for the quarter totaled $21.3 million, up six percent from the comparable quarter in 1992. Specifically, fees earned on discount brokerage services and annuity sales increased 27 percent, service changes on deposit accounts rose 20 percent and trust fees grew 11 percent.
 Fourth Financial's third quarter noninterest expense of $58.8 million represents a 15 percent increase from the year-ago quarter, which Knudson principally attributed to its heightened acquisition activity. The company has completed 15 acquisitions in two years, he noted. In addition, mortgage loan prepayments have resulted in an acceleration of the amortization of mortgage servicing expense in 1993, which totaled $1.6 million. At the end of the quarter, the remaining unamortized premium was $1.7 million.
 "Each acquisition we make requires substantial upfront investment," says Knudson. "Prior to an acquisition, we incur due diligence expenses associated with thoroughly assessing credit and other business risks. Afterward, our philosophy is to convert the data processing systems of each company as rapidly as possible, consolidate back-office operations, instill the BANK IV credit culture and invest in the automation and physical facilities we deem necessary. All of these require the commitment of significant resources."
 Fourth Financial's efficiency ratio was 68.73 percent for the quarter compared to 62.42 percent in the third quarter of 1992. "There are two principal reasons for the higher ratio," Knudson said. "One is the substantial investment we make in the acquisition process. Approximately three percentage points of our efficiency ratio are related to the expense of acquisition and conversion activities. The other reason relates to the sheer size of our growth relative to the size of the company. BANK IV Oklahoma, which has assets of $1.60 billion and was established only a year ago, had an efficiency ratio of 75 percent in the third quarter, resulting in a higher efficiency ratio for the entire company. We expect to incur costs as we continue to make acquisitions. However, we believe the long-term benefit of our acquisition activities justifies the increased expense. As we complete the assimilation process of our acquired companies, we expect to achieve efficiencies and increased revenues, which will improve our overall ratio."
 Acquisitions
 Fourth Financial has three pending acquisitions, two in Oklahoma and one in Missouri, that will increase the company's size to $7.3 billion. During the quarter, the company completed the acquisition of a $467 million four-bank holding company in northeastern Oklahoma. Pending acquisitions are a $515 million thrift in Springfield, Mo., a $120 million bank in Ponca City, Okla., and a $207 million bank in Tulsa.
 Comparative Balance Sheet
 Total assets at Sept. 30, 1993, were $6.52 billion, compared to its originally reported assets of $4.5 billion at Sept. 30, 1992. As restated for the effects of pooling interest acquisitions, Fourth Financial's assets totaled $5.68 billion at the end of the third quarter of 1992. The vast majority of the company's asset growth was related to its acquisition activity.
 Total loans were $2.83 billion at Sept. 30, 1993, compared to $2.56 billion at Sept. 30, 1992, restated for poolings of interests. Total deposits were $5.08 billion at Sept. 30, 1993, and $4.56 billion at Sept. 30, 1992.
 Fourth Financial maintains a strong capital position. Stockholders' equity at Sept. 30, 1993, was $543 million or 8.3 percent of total assets. Book value per share at the end of the third quarter was $17.85, up from $16.43 at the end of the third quarter of 1992. The company's leverage capital ratio of 7.53 percent and its risk-based capital ratio of 14.70 percent far exceed regulatory minimums of 3.00 percent and 8.00 percent, respectively.
 Credit Quality
 Nonperforming assets were $47.4 million at Sept. 30, 1993, compared to $67.5 million at Sept. 30, 1992. The current total includes $11.2 million associated with its third-quarter acquisition. Nonperforming loans were $30.8 million at Sept. 30, 1993, compared to $41.9 million at Sept. 30, 1992. Net charge-offs in the first nine months of the year were $12.5 million, or 0.62 percent (annualized) of average loans and leases, compared to $15 million, or 0.76 percent, in the prior year-to- date. Approximately 72 percent of the current year charge offs were associated with the third-quarter acquisition.
 The allowance for credit losses at Sept. 30, 1993, was $66.4 million, or 216 percent, of nonperforming loans. This compares to $68.6 million, or 164 percent, at Sept. 30, 1992.
 Outlook
 "We are encouraged by Fourth Financial's success to date," Knudson said. "We remain focused on improving the company's operating efficiency and we continue to seek acquisition opportunities that will broaden our fee revenues. We are fortunate to be in markets whose economies, while not robust, are healthy and stable. We are on track toward our goal to become the leading financial services provider in the Midwest."
 The company currently operates 77 offices in 31 Kansas communities through its subsidiary, BANK IV, Kansas, N.A., and 31 offices in seven Oklahoma communities through its subsidiary, BANK IV Oklahoma, N.A. The BANK IV banks provide a full line of banking and financial services for consumers, agri-business, 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.
 FOURTH FINANCIAL CORPORATION
 Income Statement Information ($000s)
 Periods ended Sept. 30 Three Months Percent
 1993 1992(1) Change
 Interest income $105,551 $100,584 4.9
 Interest expense 43,700 43,675 0.1
 Net interest income 61,851 56,909 8.7
 Provision for credit losses -- 3,017
 Net interest income after
 provision for credit losses 61,851 53,892 14.8
 Noninterest Income:
 Trust 4,623 4,173 10.8
 Service charges on deposit
 accounts 7,858 6,533 20.3
 Bank card fees 3,736 3,651 2.3
 Investment securities gains 168 297 (43.4)
 Other 4,877 5,345 (8.8)
 Total noninterest income 21,262 19,999 6.3
 Noninterest Expense:
 Salaries and employee benefits 27,961 23,707 17.9
 Furniture and equipment 5,281 4,604 14.7
 Net occupancy 4,145 3,709 11.8
 FDIC insurance 2,872 2,589 10.9
 Bank card 2,077 1,200 73.1
 Amortization of intangible assets 2,556 1,332 91.9
 Net costs of operation of other
 real estate and nonperforming
 assets 106 843 (87.4)
 Nonoperating charge 8 1,152 (99.3)
 Other 13,790 12,185 13.2
 Total noninterest expense 58,796 51,321 14.6
 Income before income taxes and
 cumulative effect of a change
 in accounting principle 24,317 22,570 7.7
 Income tax expense 5,522 5,089 8.5
 Income before cumulative effect of
 a change in accounting principle 18,795 17,481 7.5
 Cumulative effect of a change in
 accounting for income taxes -- --
 Net income $18,795 $17,481 7.5
 Net income applicable to common
 and common equivalent shares $17,045 $15,731 8.4
 Fully tax-equivalent net
 interest income(2) $64,324 $59,493 8.1
 Per Common Share Data:
 Primary earnings per common and
 common equivalent share:
 Income applicable to common and
 common equivalent shares before
 cumulative effect of a change
 in accounting principle $0.69 $0.64 7.8
 Cumulative effect of a change in
 accounting for income taxes -- --
 Net income applicable to common
 and common equivalent shares 0.69 0.64 7.8
 Fully diluted earnings per common
 share:
 Income before cumulative effect of
 a change in accounting principle 0.67 0.63 6.3
 Cumulative effect of a change in
 accounting for income taxes -- --
 Net income 0.67 0.63 6.3
 Fully diluted earnings per common
 share as originally reported 0.67 0.58 15.5
 Common dividend(3) 0.24 0.22 9.1
 Book value at period-end 17.85 16.43 8.6
 Book value at period-end
 (fully diluted) 19.21 17.91 7.3
 Average common shares outstanding
 (000s) 24,799 24,474 1.3
 Period-end common shares
 outstanding (000s) 24,807 24,323 2.0
 Period-end common shares
 outstanding assuming full
 dilution (000s) 28,255 27,953 1.1
 Earnings Performance Ratios(4):
 Return on assets 1.16 1.26
 Return on total stockholders'
 equity 13.90 14.18
 Return on common stockholders'
 equity 15.50 16.03
 Net yield on earning assets(2) 4.39 4.74
 Efficiency ratio(5) 68.73 62.42
 Summary Statement of Condition
 Information ($000s):
 Period-end assets 14.8 14.8
 Period-end loans and leases 2,828,112 2,564,493 10.3
 Period-end deposits 5,081,208 4,557,540 11.5
 Period-end long-term debt 14,604 30,212 (51.7)
 Period-end common stockholders'
 equity 442,809 399,611 10.8
 Period-end stockholders' equity 542,809 500,741 8.4
 Average assets 6,443,447 5,509,248 17.0
 Average loans and leases 2,784,195 2,587,876 7.6
 Average investment securities 3,040,859 2,330,248 30.5
 Average earning assets 5,855,944 5,014,267 16.8
 Average deposits 5,123,138 4,594,607 11.5
 Average common stockholders'
 equity 436,408 390,481 11.8
 Average stockholders' equity 536,408 490,481 9.4
 Asset Quality ($000s):
 Allowance for credit losses:
 Beginning of period $69,898 $68,882 1.5%
 Allowance of purchased banks -- 1,502
 Provision for credit losses -- 3,017
 Net charge-offs (3,465) (4,794) (27.7)
 End of period $66,433 $68,607 (3.2)
 Nonperforming assets:
 Nonaccrual loans $30,360 $35,188 (13.7)
 Troubled debt restructurings 462 6,693 (93.1)
 Total nonperforming loans 30,822 41,881 (26.4)
 Other real estate and
 nonperforming assets 16,622 25,623 (35.1)
 Total nonperforming assets $47,444 $67,504 (29.7)
 Past due loans (90 days or more) $7,254 $12,593 (42.4)
 Asset Quality Ratios:
 Net charge-offs (annualized)/
 average loans and leases 0.49 0.74
 Nonperforming assets/period-end
 loans plus other real estate
 and nonperforming assets 1.67 2.61
 Allowance for credit losses/
 nonperforming loans 215.54 163.81
 Allowance for credit losses/
 period-end loans and leases 2.35 2.68
 Capital Ratios:
 Stockholders' equity/assets 8.33 8.81
 Double leverage ratio(6) 93.17 77.80
 Leverage ratio(7) 7.53 8.41
 Tier I risk-based capital(8) 13.45 14.25
 Total risk-based capital(8) 14.70 15.50
 Common dividend payout ratio 39.94 28.26
 NOTES: (1) Prior year financial statements have been restated to reflect poolings of interests.
 (2) Stated on a tax-equivalent basis assuming a marginal tax rate of 35 percent in 1993 and 34 percent in 1992.
 (3) Dividends per common share represent historical dividends declared without adjustment for the poolings of interests.
 (4) Financial ratios are based on daily averages for all statement of condition items. Earnings have been annualized where appropriate.
 (5) Excludes nonoperating revenues and expenses.
 (6) Investments in subsidiaries divided by period-end stockholders' equity.
 (7) Tier I capital divided by third quarter average assets less certain intangibles.
 (8) Tier I capital is composed of common stockholders' equity less certain intangibles plus preferred stockholders' equity.
 Total capital is Tier I capital plus the allowance for credit losses (limited to 1.25 percent of risk-weighted assets).
 Both capital amounts are divided by risk-weighted assets.
 -0- 10/14/93
 /CONTACT: Bernie McLaughlin, vice president/marketing, 316-261-2095; Michael J. Shonka, chief financial officer, (investors) 316-261-4510, both of Fourth Financial Corp./
 /FIRST AND FINAL ADD -- TABULAR MATERIAL -- TO FOLLOW/
 (FRTH)


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

TM -- NY102 -- 2542 10/15/93 00:04 EDT
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Date:Oct 15, 1993
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