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GREAT LAKES BANCORP POSTS $4.9 MILLION 3RD-QUARTER NET OPERATING EARNINGS

 ANN ARBOR, Mich., Oct. 21 /PRNewswire/ -- Great Lakes Bancorp (NASDAQ-NMS: GLBC) reported third-quarter net operating earnings of $4.9 million, or 69 cents per share. In 1992, third-quarter net operating earnings totaled $3.3 million, or 47 cents per share.
 Nine-month net operating earnings totaled $13.0 million or $1.88 per share, compared with $2.2 million or 1 cent per share in the first nine months of 1992. Net operating earnings excludes extraordinary items and the elimination of goodwill, providing a more reliable indicator of profitability when these one-time events occur.
 As Great Lakes announced in August, the bank eliminated its goodwill in the third quarter, a non-cash charge of $44.6 million. As a result, net income, after the accounting change, was a negative $39.8 million for the quarter and a negative $31.8 million for the year to date. Net income in 1992 benefited from a change in accounting principle, which increased net income by $5.0 million. In 1992, third-quarter net income totaled $3.6 million, and nine-month net income totaled $7.5 million.
 Goodwill is an accounting term for the amount an acquiring company pays above market value for the assets of another company. Great Lakes' goodwill resulted from the acquisitions of two thrifts in 1982.
 "By eliminating the bank's goodwill, we reduced our annual expenses by $3.3 million, the expense of amortizing goodwill over time," said Robert J. Delonis, Great Lakes' president and chief executive officer. "That improves operating earnings by 55 cents per share each year. And, as a result, the profitability measures used to compare us to other financial institutions, such as returns on equity and assets, will also improve."
 Great Lakes' annualized operating return on average assets was 0.64 percent for the first nine months. The annualized operating return on average common equity was 14.5 percent for the nine months. By comparison, without goodwill elimination the returns on average assets and common equity for the nine months would have been approximately 0.50 percent and 9 percent, respectively.
 Net operating earnings also improved due to a further decline in provisions for credit losses, and to the continued record pace of residential mortgage originations, which led to gains from the sales of longer-term, fixed-rate mortgages.
 The provision for credit losses declined to $2.3 million in the third quarter, compared with $4.5 million in the quarter a year ago; for the first nine months, provisions were down to $10.3 million, compared with $19.8 million in the same period last year.
 Gains on the sale of mortgages totaled $2.0 million in the third quarter compared with $222,000 in the quarter last year. Gains for the first nine months totaled $8.6 million; gains in the nine-month period last year included $1.7 million on the sale of mortgages and $4.5 million on the sale of branches.
 "We look forward to further declines in credit-loss provisions in 1994 now that we have built reserves to sufficient levels and credit quality is beginning to improve," Delonis noted.
 Nonperforming assets totaled 2.67 percent of assets at Sept. 30. Classified assets, which include nonperforming assets as well as other loans posing some degree of increased risk, totaled 95 percent of the bank's tangible capital and reserves for possible credit losses. Reserves for possible loan losses totaled 83 percent of nonperforming loans.
 Great Lakes originated more residential mortgages in the first nine months than it did in all of 1992, which was also a record year. Residential mortgage originations this year totaled $249 million in the third quarter and $545 million in the first nine months, compared with $114 million and $370 million in the third-quarter and nine-month periods a year ago.
 Tangible capital, which already excludes goodwill, was unaffected by the goodwill write-off, and thus increased with the strong operating earnings to $128.4 million, up 16 percent from a year ago. Tangible capital stood at 4.86 percent of tangible assets at Sept. 30. Great Lakes' tangible book value per common share increased to $17.85.
 Great Lakes' risk-based capital totaled $162.3 million, or 10.55 percent of risk-based assets. Risk-based capital is a measure of the bank's strength in relation to the risk associated with its assets.
 With $2.6 billion in assets and $1.6 billion in deposits, Great Lakes Bancorp is Michigan's second largest savings bank and eighth largest financial institution. Great Lakes has branches concentrated in three primary markets in Michigan's lower peninsula: the regions surrounding Ann Arbor, Battle Creek, and Saginaw. In addition, a division of Great Lakes, Dollar Federal Savings Bank, has a significant presence in Hamilton, Ohio. Great Lakes also operates Great Lakes Mortgage Co., a mortgage banking subsidiary.
 GREAT LAKES BANCORP, A Federal Savings Bank
 FINANCIAL HIGHLIGHTS
 (Dollars in Millions, Except Per-Share Data)
 THREE MONTHS ENDED
 09/30/93 09/30/92
 EARNINGS DATA
 Net Interest Income $18.6 19.2
 Gain on Sale of Mortgages
 and Securities, Net 2.0 0.2
 Gain (Loss) on Sale of Branches -- 4.5
 Provision for Possible Loan Losses 2.3 4.0
 Provision for Possible REO Losses -- 0.5
 Amortization of Intangibles 2.8 0.8
 Income (Loss) Before Extraordinary Item
 and Change in Accounting Principle 1.1 3.3
 Gain on Early Extinguishment of Debt -- 0.3
 Change in Accounting Principle (40.9) --
 Net Income (Loss) (39.8) 3.6
 PER SHARE DATA
 Primary Earnings (Loss) Per Share (6.73) 0.52
 Fully Diluted Earnings (Loss) Per Share (6.73) 0.51
 Tangible Book Value per Common
 Share at Period End 17.85 15.62
 OTHER DATA
 Total Assets 2,646 2,716
 Mortgage-Backed Certificates 579 512
 Loans Receivable, Net 1,824 1,917
 Deposits 1,614 1,700
 Stockholders' Equity 129 158
 Tangible Capital 128 111
 The following information is presented in percentages:
 Tangible Capital Ratio 4.9 4.2
 Core Capital Ratio 4.9 5.2
 Risk-based Capital Ratio 10.6 10.5
 Nonperforming Assets to Total
 Assets (1) 2.67 2.85
 Yield on Average Earning Assets 7.81 8.94
 Cost of Funds 4.86 5.85
 Interest Rate Spread 2.95 3.09
 (1) Nonaccruing loans, restructured loans yielding less than the Bank's cost of funds, real estate acquired as a result of foreclosure or deed in lieu thereof, and in-substance foreclosures.
 GREAT LAKES BANCORP, A Federal Savings Bank
 FINANCIAL HIGHLIGHTS
 (Dollars in Millions, Except Per-Share Data)
 NINE MONTHS ENDED
 09/30/93 09/30/92
 EARNINGS DATA
 Net Interest Income 58.8 59.9
 Gain on Sale of Mortgages
 and Securities, Net 8.6 1.7
 Gain (Loss) on Sale of Branches -- 4.5
 Provision for Possible Loan Losses 8.5 15.6
 Provision for Possible REO Losses 1.8 4.2
 Amortization of Intangibles 4.5 2.5
 Income (Loss) Before Extraordinary Item
 and Change in Accounting Principle 9.3 2.2
 Gain on Early Extinguishment of Debt (0.2) 0.3
 Change in Accounting Principle (40.9) 5.0
 Net Income (Loss) (31.8) 7.5
 PER SHARE DATA
 Primary Earnings (Loss) Per Share (5.82) 0.99
 Fully Diluted Earnings (Loss) Per Share (5.82) 0.97
 Tangible Book Value per Common
 Share at Period End 17.85 15.62
 OTHER DATA
 Total Assets 2,646 2,716
 Mortgage-Backed Certificates 579 512
 Loans Receivable, Net 1,824 1,917
 Deposits 1,614 1,700
 Stockholders' Equity 129 158
 Tangible Capital 128 111
 The following information is presented in percentages:
 Tangible Capital Ratio 4.9 4.2
 Core Capital Ratio 4.9 5.2
 Risk-based Capital Ratio 10.6 10.5
 Nonperforming Assets to Total
 Assets (1) 2.67 2.85
 Yield on Average Earning Assets 8.11 9.11
 Cost of Funds 5.05 6.01
 Interest Rate Spread 3.06 3.10
 (1) Nonaccruing loans, restructured loans yielding less than the Bank's cost of funds, real estate acquired as a result of foreclosure or deed in lieu thereof, and in-substance foreclosures.
 -0- 10/21/93
 /CONTACT: James S. Patterson, Vice President of Corporate Communications of Great Lakes Bancorp, 313-769-8300, Ext. 4116/
 (GLBC)


CO: Great Lakes Bancorp ST: Michigan IN: FIN SU: ERN

SM -- DE011 -- 5068 10/21/93 10:22 EDT
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Date:Oct 21, 1993
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