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HARRIS BANKCORP REPORTS 1992 NET INCOME

 CHICAGO, Jan. 21 /PRNewswire/ -- Harris Bankcorp today reported 1992 net income of $113.3 million, up 9 percent from $104.1 million in 1991, and an all-time earnings record.
 Fourth quarter net income was $30.8 million, up 10 percent from 1991 fourth quarter earnings of $27.9 million. Returns on average assets and average equity during the current quarter were .97 percent and 13.31 percent, respectively, compared to .82 percent and 13.08 percent in 1991's fourth quarter. B. Kenneth West, chairman and chief executive officer, attributed the earnings increase primarily to higher noninterest income, particularly trust and investment management fees and foreign exchange activities.
 Net interest income on a fully taxable equivalent basis amounted to $116.0 million during the fourth quarter, a 3 percent decline from the same quarter one year ago. Average earnings assets declined 7 percent from $11.69 billion to $10.83 billion in the current quarter. Net interest margin, the other principal determinant of net interest income, rose during the quarter from 4.07 percent to 4.27 percent in 1992, reflecting higher levels of noninterest-bearing supporting funds, wider market spreads and a more favorable mix of interest-bearing sources of funds.
 Noninterest income rose 16 percent from the same quarter last year to 87.9 million. Trust and investment management fees, foreign exchange income and service charges all experienced strong growth. Profits from bond and financial instrument trading activities and charge card fees declined quarter to quarter. During the 1992 fourth quarter, the corporation realized a net gain of $2.6 million from the sale of certain portfolio securities compared to virtually no net gains or losses in 1991.
 Noninterest expenses were $143.0 million in the quarter, up $10.1 million or 8 percent from 1991 fourth quarter. A significant portion of this increase was attributable to higher employee benefits, along with costs associated with providing customer guarantees.
 Although pretax income increased by $1.8 million, income tax expense decreased by $1.1 million in the fourth quarter. The primary reasons for this decline in expense were the additional utilization of tax credits carried forward from prior periods and the recognition of previously unrecorded tax benefits.
 The current provision for credit losses of $18.6 million was unchanged from the fourth quarter of 1991. Net loan charge-offs during the 1992 quarter were $22.9 million versus $20.0 million in the same period last year.
 For the full year, net income was $113.3 million, up from $104.1 million in 1991. Return on average assets was .86 percent in 1992 compared to .80 percent in the prior year while return on average equity was 12.71 percent for 1992 and 12.70 percent for 1991.
 Net interest income on a fully taxable equivalent basis was $476.9 million, up 2 percent for the year. Average earnings assets were virtually unchanged from the prior year while net interest margin improved from 4.11 percent in 1991 to 4.21 percent in 1992. The more favorable margin reflected wider market spreads and higher levels of noninterest-bearing supporting funds.
 Total noninterest income in 1992 was $335.0 million, up 13 percent over 1991. Revenue from service fees and charges rose 31 percent or $19.1 million. Almost one-half of this increase resulted from a change in the corporation's accounting for recognition of certain types of fees. Other noninterest income included net realized gains of $15.8 million from the sale of most of the corporation's remaining claims in Mexico and Brazil. Trust and investment management fees and foreign exchange income also increased significantly from the prior year. The corporation had a $4.5 million loss from bond and financial instrument trading activities compared to an $8.4 million profit in the prior year. Charge card fees also declined from the prior year. The corporation realized a $4.2 million net gain on the sale of certain investment portfolio securities during 1992 compared to a net gain of $2.6 million in 1991.
 Noninterest expenses in 1992 totaled $556.0 million, up 9 percent from 1991. Current year expenses included a special $11.8 million charge for the writedown of land and related pre-construction expenditures originally capitalized in connection with the previously planned construction of a new operations center. Management determined that a writedown was necessary because of the uncertainty of proceeding with the project in the near future. The other principal factor comprising the increase in expenses was higher compensation costs, including salaries and retirement-related benefits.
 Income tax expense rose by $1.3 million in the current year reflecting higher pretax income, partially offset by the recognition of previously unrecorded income tax credits.
 The 1992 provision for credit losses of $77.6 million was down slightly from $79.3 million recorded in 1991 while 1992 net loan charge- offs of $72.5 million were also down from $79.0 million in the prior year. At year-end, the allowance for possible credit losses was $130.1 million, or 1.84 percent of total loans outstanding, compared to the prior year-end allowance of $125.1 million and the related ratio of 1.58 percent. Total nonperforming assets declined to $154.4 million at Dec. 31, 1992, from $166.4 million at the end of the prior year, although the percentage of nonperforming assets to total loans increased slightly to 2.2 percent compared to 2.1 percent of loans one year earlier.
 At Dec. 31, 1992, equity capital of Harris Bankcorp amounted to $930 million compared to $861 million at Dec. 31, 1991. The increase resulted from earnings for the prior twelve months reduced by dividends of $44 million. Harris Bankcorp's regulatory capital leverage ratio was 7.20 percent for the 1992 fourth quarter compared to 6.22 percent one year earlier. Banking regulators generally require most banking institutions to maintain leverage capital ratios of non less than 4 percent.
 HARRIS BANKCORP, INC. CONSOLIDATED EARNINGS HIGHLIGHTS
 (in thousands, except ratios and per share data)
 (1992 figures are subject to final audit)
 Year ended Dec. 31 Percent
 1992(a) 1991 Change
 Net interest income $ 443,852 $ 426,287 + 4
 Net interest income
 (fully taxable equivalent) 476,881 465,611 + 2
 Provision for credit losses 77,560 79,310 - 2
 Noninterest income 335,029 295,439 +13
 Noninterest expenses 565,973 517,575 + 9
 Net income 113,253 104,068 + 9
 Net income per share 16.99 15.61 + 9
 Return on average assets
 (in percents) .86 .80
 Return on average equity
 (in percents) 12.71 12.70
 Quarter ended Dec. 31, Percent
 1992(A) 1991 Change
 Net interest income $ 109,465 $ 109,951 - -
 Net interest income
 (fully taxable equivalent) 115,977 119,471 - 3
 Provision for credit losses 18,595 18,585 - -
 Noninterest income 87,938 75,552 +16
 Noninterest expenses 143,012 132,953 + 8
 Net income 30,766 27,863 +10
 Net income per share 4.61 4.18 +10
 Return on average assets
 (in percents) .97 .82
 Return on average equity
 (in percents) 13.31 13.08
 CONSOLIDATED STATISTICS
 (in millions)
 At Dec. 31, Percent
 1992(A) 1991 Change
 Money market assets $ 1,146 $ 1,968 -42
 Loans, net of unearned income 7,083 7,907 -10
 Investment securities 2,576 2,694 - 4
 Deposits 8,777 9,459 - 7
 Stockholders' equity 930 861 + 8
 Total assets 12,729 14,481 -12
 Year-To-Date
 Daily Average Balances Percent
 1992(A) 1991 Change
 Money market assets $ 1,025 $ 1,260 -19
 Loans, net of unearned income 7,294 7,408 - 2
 Investment securities 2,782 2,478 +12
 Deposits 8,873 9,080 - 2
 Stockholders' equity 891 820 + 9
 Total assets 13,160 13,077 + 1
 (A) 1992 financial results are unaudited.
 -0- 1/21/93
 /CONTACT: Paul Skubic, 312-461-2220, or Mary Ullrich, 312-461-6905, both of Harris Bankcorp/


CO: Harris Bankcorp ST: Illinois IN: FIN SU: ERN

SH -- NY032 -- 7355 01/21/93 11:22 EST
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Date:Jan 21, 1993
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