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METROPOLITAN FINANCIAL CORPORATION REPORTS MOST SUCCESSFUL YEAR IN ITS HISTORY

 METROPOLITAN FINANCIAL CORPORATION
 REPORTS MOST SUCCESSFUL YEAR IN ITS HISTORY
 MINNEAPOLIS, Jan. 15 /PRNewswire/ -- Metropolitan Financial Corporation (NYSE: MFC), today reported the most successful year in its 65 year history. Improved core earnings and higher levels of noninterest income from gains on sales of securities contributed to a net income increase of over 100 percent.
 Net income for the year ended Dec. 31, 1991 was $57,439,000, up over 100 percent from $28,331,000. Fully diluted earnings for the year were $4.33 per common share, up 76 percent from fully diluted earnings of $2.46 per share for 1990. Net income for the fourth quarter was $23,440,000, or $1.77 per common share on a fully diluted basis, up significantly when compared to $11,724,000, or $1.01 per fully diluted share, for the fourth quarter 1990.
 Primary earnings per share were $5.32 for the year ended Dec. 31, 1991, up 86 percent from $2.86 for the year 1990. Primary earnings per share were $2.19 for the fourth quarter, up 77 percent from $1.24 for the fourth quarter one year ago.
 Paul A. Lipetzky, president and chief operating officer of the regional thrift holding company, stated, "For the third year in a row, Metropolitan Financial Corporation has broken all previous records for corporate performance, achieving a return on average assets for the year of 1.25 percent and a return on average equity of 22.78 percent. As the largest, best capitalized thrift institution in the upper Midwest, we achieved record levels of net interest income, net income and earnings per share. The 1991 interest rate environment, continued strong loan production and our acquisition strategy have significantly enhanced our retail banking presence through Metropolitan Federal Bank, fsb, our insured savings bank subsidiary. Edina Realty, our real estate subsidiary, increased sales volume in 1991 serving the largest metropolitan area in the upper Midwest."
 Net interest income before the provision for credit losses for 1991 was $105,112,000, up 39 percent from $75,692,000 reported last year. For the fourth quarter, net interest income before the provision for credit losses was $27,896,000, up 25 percent over the $22,350,000 reported for the fourth quarter of 1990. The net interest margin for the fourth quarter was 2.64 percent, compared to 2.24 percent for the same quarter one year ago.
 Noninterest income for the year 1991 was $89,441,000 up 39 percent from $64,331,000 for the year 1990. Noninterest income for the quarter was $31,945,000, up 96 percent from $16,310,000 in 1990. Gain on sale of investments and mortgage backed securities account for $18,862,000 of the current quarter total and $33,366,000 of the annual total. The gains taken during the year strengthened capital and reduced prepayment risk resulting from the declining interest rate environment. Sales throughout the year also provided liquidity to fund new loan production, which was exceptionally strong. Management plans continued asset sales with $111 million of loans designated as 'held for sale' as of Dec. 31, 1991.
 Real estate sales and title activity improved over the totals reported in 1990. Edina Realty, Inc., reported real estate sales commissions totalling $26,172,000 for the year, up from $25,938,000 last year and, for the quarter commissions were $5,776,000, compared to $5,652,000 for the fourth quarter a year ago. Equity Title Services, Inc. reported title closing fees of $8,001,000 for the year, up from $7,035,000 for last year, and for the quarter title closing fees were $1,919,000, compared to $1,539,000 for the last quarter in 1990.
 Noninterest expense for the year just ended was $124,687,000 compared to $108,656,000 for one year ago. Noninterest expense for the fourth quarter was $30,021,000, compared to the $27,587,000 reported for the quarter ended Dec. 31, 1990. The increase over the previous year is due primarily to higher operating expense in compensation, occupancy and advertising and higher deposit insurance premiums related to late 1990 and early 1991 acquisitions.
 For the quarter, Metropolitan provided $4,380,000 for income tax expense, compared to a benefit of $2,133,000 last year. The increased tax provision is the result of the level of gains taken in the quarter and the company's previously announced settlement with the Resolution Trust Corporation. The increased net income resulting from the gains and the reduced tax exempt income resulting from the settlement enabled the company to utilize a portion of its net operating loss carryforwards (NOLs) before expiration and offset goodwill associated with the 1988 acquisitions. Management does not expect a similar level of tax expense in the future due to available NOL carryforwards.
 Consolidated assets at Dec. 31, 1991 were $4.668 billion compared to the $4.531 billion reported at Sept. 30, 1991 and $4.546 reported at Dec. 31, 1990. At year end the bank's deposits stood at $3,825,957,000 up almost 13 percent over the $3,394,175,000 reported at Dec. 31, 1990. While experiencing a year of strong loan production, Metropolitan reduced its negative "gap," the industry's measure of interest rate risk. The negative "gap" measure was 9.5 percent, significant lower than 14.7 percent on Dec. 31, 1990.
 Nonperforming assets at Dec. 31, 1991 were $110,859,000, or 2.38 percent of total assets, down when compared with the Sept. 30, 1991 figure of $116,570,000, or 2.57 percent of total assets. Management expects this trend to continue because the December 1991 settlement of the company's agreement with the RTC enabled Metropolitan to adopt an aggressive asset disposal plan with sales programs designed to take advantage of the discounted carrying values and the ability to act promptly on market opportunities.
 Norman M. Jones, chairman of the company's board of directors, said, "While we have realized outstanding operating results, we have continued to strengthen our balance sheet. The tangible capital to asset ratio has improved from 3.60 percent at Dec. 31, 1990 to 4.58 percent at Dec. 31, 1991 and total equity increased from $225.7 million to $278.8 million. Deposits increased from $3.4 billion to $3.8 billion through acquisition and improved customer service in recently entered markets. Loan production reached $958 million, a near record, while interest rate risk was lowered and credit quality maintained."
 Shareholders' equity grew, both as a percentage and in real terms. Shareholders' equity was $278,763,000 on December 31, 1991, up 23 percent from $225,746,000 reported a year ago. As a result, Metropolitan Federal Bank improved all capital ratios during the year. Metropolitan exceeded all of the fully phased in regulatory capital requirements with a core capital to core assets ratio of 5.36 percent, and a risk adjusted capital to risk adjusted asset ratio of 12.35 percent.
 Metropolitan Financial Corporation is a regional financial services holding company. Its full service consumer savings bank, Metropolitan Federal Bank, Fargo, North Dakota, operates over 120 offices in 99 communities in the states of North Dakota, Minnesota, Iowa, South
Dakota, Wisconsin and Arizona. Metropolitan is the Twin Cities' largest originator of residential mortgage loans. The corporation's real estate sales and brokerage subsidiary, Edina Realty, has been rated #1 nationally in customer satisfaction by a leading consumer magazine and serves Minnesota and western Wisconsin.
 Metropolitan Financial Corporation's common and Series A preferred stock trade on the New York Stock Exchange, the common under the symbol MFC. The Series B preferred stock and warrant trade on the NASDAQ System under the symbols MFCNP and MFCNW, respectively.
 METROPOLITAN FINANCIAL CORPORATION
 Selected Consolidated Operations Data and Ratios
 (Dollar amounts in thousands, except per share data)
 4th Quarter
 Three Months Ended Year Ended
 12/31/91 12/31/90 12/31/91 12/31/90
 Operations Data
 Net interest income $27,896 $22,350 $105,112 $75,692
 Provision for credit losses 2,000 1,482 8,000 6,011
 Net interest income after provision
 for credit losses 25,896 20,868 97,112 69,681
 Net gain on sale of assets 18,924 4,783 33,591 13,370
 Other noninterest income 13,021 11,527 55,850 50,961
 Noninterest expense 30,021 27,587 124,687 108,656
 Income before income taxes and
 accounting change 27,820 9,591 61,866 25,356
 Income taxes (benefit) 4,380 (2,133) 4,427 (1,980)
 Income before
 accounting change 23,440 11,724 57,439 27,336
 Accounting change 0 0 0 995
 Net Income $23,440 $11,724 $57,439 $28,331
 Net Income Per Share:
 Primary
 Income per share before
 cumulative effect of
 accounting change $2.19 $1.24 $5.32 $2.74
 Cumulative effect of
 accounting change 0.00 0.00 0.00 0.12
 Net Primary $2.19 $1.24 $5.32 $2.86
 Fully Diluted
 Income per share before
 cumulative effect of
 accounting change $1.77 $1.01 $4.33 $2.38
 Cumulative effect of
 accounting change 0.00 0.00 0.00 0.08
 Net Fully Diluted $1.77 $1.01 $4.33 $2.46
 Ratios (percents)
 Return on average assets 2.07 1.09 1.25 0.70
 Return on average equity 33.74 22.35 22.78 14.35
 Average equity to
 average assets 6.14 4.89 5.47 4.88
 Net interest margin 2.64 2.24 2.44 2.02
 Noninterest expense/
 average assets 2.65 2.57 2.70 2.69
 12/31/91 12/31/90
 Financial Condition
 Total assets $4,667,680 $4,545,741
 Loans 2,353,536 1,936,677
 Deposits 3,825,957 3,394,175
 Shareholders' equity 278,763 225,746
 Nonperforming assets 110,859 73,726
 Nonperforming assets
 to total assets 2.38 1.62
 Book value per common share 23.13 18.82
 Tangible book value per common share 16.55 11.29
 Market value per common share 20.88 7.60
 Capitalization Metropolitan Federal
 Bank, fsb (percents)
 Tangible capital (percents) 4.58 3.60
 Core capital 5.36 4.52
 Risk based capital 12.35 12.33
 METROPOLITAN FINANCIAL CORPORATION
 Condensed Consolidated Statements of Condition
 (In thousands)
 4th Quarter
 December 31, December 31,
 1991 1990
 (Unaudited)
 Assets
 Cash and due from banks $57,363 $47,757
 Federal funds sold 105 2,030
 Short term interest bearing
 deposits 36,254 69,705
 Investment securities
 (market: Dec. 31, 1991-$100,889;
 Dec. 31, 1990-$202,826) 100,693 204,277
 Mortgage backed securities
 (market: Dec. 31, 1991-$1,884,794;
 Dec. 31, 1990-$1,515,662) 1,798,413 1,511,456
 Loans 2,353,536 1,936,677
 FHLB stock 46,466 42,225
 FSLIC notes 0 366,768
 FSLIC covered assets 0 120,312
 Accrued interest 34,568 45,579
 Real estate owned 66,018 42,828
 Office properties and equipment 40,437 35,268
 Goodwill 62,720 66,993
 Other assets 71,107 53,866
 Total Assets $4,667,680 $4,545,741
 Liabilities
 Deposits $3,825,957 $3,394,175
 Borrowings 517,574 649,376
 Securities sold under
 repurchase agreements --- 220,915
 Accrued interest 27,323 24,589
 Other liabilities 18,063 30,940
 Total Liabilities 4,388,917 4,319,995
 Shareholders' Equity
 Preferred stock 23 23
 Common stock, par value
 $.01 per share; authorized
 30,000,000 shares; issued
 Dec. 31, 1991-9,786,789 shares,
 Dec. 31, 1990-9,188,720 shares 98 92
 Additional paid in capital 138,025 133,521
 Retained earnings 143,146 95,025
 Less cost of common stock
 in treasury-249,987 shares
 at Dec. 31, 1991;
 286,302 shares at Dec. 31, 1990 (2,529) (2,915)
 Total Shareholders' Equity 278,763 225,746
 Total Liabilities and
 Shareholders' Equity $4,667,680 $4,545,741
 Condensed Consolidated Statements of Income
 (In thousands, except per share data) (Unaudited)
 4th Quarter
 Three Months Ended Year Ended
 12/31/91 12/31/90 12/31/91 12/31/90
 Interest Income
 Loans $57,313 $48,976 $216,985 $183,655
 Mortgage backed securities 36,116 33,214 145,124 114,377
 Investments 4,206 5,188 19,001 23,111
 FSLIC notes and covered assets 673 10,458 25,910 46,339
 -- 98,308 97,836 407,020 367,482
 Interest Expense
 Deposits 62,272 58,532 256,068 214,695
 Borrowings 8,140 16,954 45,840 77,095
 -- 70,412 75,486 301,908 291,790
 Net interest income 27,896 22,350 105,112 75,692
 Provision for credit losses 2,000 1,482 8,000 6,011
 Net interest income after
 provision for credit losses 25,896 20,868 97,112 69,681
 Noninterest Income
 Gain on sale of mortgage loans 62 725 225 4,645
 Gain on sale of mortgage
 loan servicing 0 0 0 2,155
 Gain on sale of
 investments and mbs 18,862 4,058 33,366 6,570
 Mortgage loan servicing fees 2,464 1,956 10,705 8,076
 Real estate sales commissions 5,776 5,652 26,172 25,938
 Title closing fees 1,919 1,539 8,001 7,035
 Service charges on
 deposit accounts 1,405 1,169 5,414 4,209
 Other 1,457 1,211 5,558 5,703
 -- 31,945 16,310 89,441 64,331
 Noninterest Expense
 Compensation and
 related items 12,312 10,818 47,963 43,847
 Occupancy 3,846 3,396 15,201 13,563
 Data processing 1,560 1,331 6,585 5,384
 Advertising 2,075 2,365 9,491 8,625
 Deposit insurance premium 2,120 1,403 8,012 5,416
 Goodwill 1,334 1,426 5,352 5,493
 Real estate owned 343 1,030 6,673 2,919
 Other general
 and administrative 6,431 5,818 25,410 23,409
 -- 30,021 27,587 124,687 108,656
 Income before income taxes &
 cum effect of actg change 27,820 9,591 61,866 25,356
 Income taxes 4,380 (2,133) 4,427 (1,980)
 Income before cumulative
 effect of actg change 23,440 11,724 57,439 27,336
 Cumulative effect of
 accounting change 0 0 0 995
 Net Income $23,440 $11,724 $57,439 $28,331
 Earnings Per Share
 Primary:
 Before cumulative effect
 of accounting change $2.19 $1.24 $5.32 $2.74
 Cumulative effect of
 accounting change 0.00 0.00 0.00 0.12
 Net Primary $2.19 $1.24 $5.32 $2.86
 Fully Diluted:
 Before cumulative effect
 of accounting change $1.77 $1.01 $4.33 $2.38
 Cumulative effect of
 accounting change 0.00 0.00 0.00 0.08
 Net Fully Diluted $1.77 $1.01 $4.33 $2.46
 METROPOLITAN FINANCIAL CORPORATION
 FINANCIAL CONDITION AND STATEMENTS OF FINANCIAL CONDITION
 (Dollar amounts in thousands, except per-share data)
 Three Months Ended Dec. 31, 199
 1991 1990
 Average Yields Average Yields
 Balance Interest & Rates Balance Interest & Rates
 ASSETS
 Mortgage backed
 securities $1,625,106 $36,116 8.89 $1,432,217 $33,214 9.28
 Loans 2,275,722 57,313 10.07 1,810,975 48,976 10.82
 FSLIC notes and
 covered assets 99,221 578 2.33 495,574 10,458 8.44
 Investment securities
 and other interest
 earning assets 220,914 4,301 7.79 259,647 5,188 7.99
 Total Interest Earning
 Assets 4,220,963 98,308 9.32 3,998,413 97,836 9.79
 Cash and due
 from banks 41,717 41,694
 Other assets 262,731 249,941
 TOTAL ASSETS $4,525,411 $4,290,048
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Transaction and passbook
 deposits $917,850 10,438 4.51 $758,157 9,992 5.27
 Certificates 2,849,893 51,834 7.22 2,433,633 48,540 7.98
 FHLB advances 331,659 6,869 8.28 556,803 11,858 8.52
 Borrowings 55,702 1,271 9.05 82,477 1,910 9.26
 Reverse repurchase
 agreements 0 0 0.00 159,456 3,186 7.99
 Total Interest Bearing
 Liabilities 4,155,104 70,412 6.72 3,990,526 75,486 7.57
 Other
 liabilities 92,433 89,652
 Shareholders'
 equity 277,874 209,870
 TOTAL LIABILITIES &
 SHAREHOLDERS'
 EQUITY $4,525,411 $4,290,048
 Net Interest Income $27,896 $22,350
 Gross Interest
 Margin (percents) 2.59 2.22
 Net Interest Margin (percents) 2.64 2.24
 Year Ended Dec. 31
 1991 1990
 Average Yields Average Yields
 Balance Interest & Rates Balance Interest & Rates
 ASSETS
 Mortgage backed
 securities $1,589,460 $145,125 9.13 $1,236,314 $114,377 9.25
 Loans 2,102,762 216,985 10.32 1,729,627 183,655 10.62
 FSLIC notes and
 covered assets377,856 25,911 6.86 512,087 46,339 9.05
 Investment securities and
 other interest earning
 assets 243,919 19,000 7.79 278,384 23,111 8.30
 Total Interest Earning
 Assets 4,313,997 407,021 9.43 3,756,412 367,482 9.78
 Cash and due
 from banks 39,035 43,208
 Other assets 257,996 244,106
 TOTAL ASSETS 4,611,028 $4,043,726
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Transaction and passbook
 deposits $905,821 43,471 4.80 $684,507 37,098 5.42
 Certificates 2,812,917 212,598 7.56 2,186,907 177,597 8.12
 FHLB advances 477,634 38,078 7.97 605,816 51,341 8.47
 Borrowings 62,538 5,767 9.22 129,421 12,705 9.82
 Reverse repurchase
 agreements 26,532 1,995 7.52 167,097 13,049 7.81
 Total Interest Bearing
 Liabilities 4,285,442 301,909 7.04 3,773,748 291,790 7.73
 Other liabilities 73,419 72,487
 Shareholders'
 equity 252,167 197,491
 TOTAL LIABILITIES &
 SHAREHOLDERS'
 EQUITY $4,611,028 $4,043,726
 Net Interest Income $105,112 $75,692
 Gross Interest Margin 2.39 2.05
 Net Interest Margin 2.44 2.02
 -0- 1/15/92
 /CONTACT: Bill Bartkowski of Metropolitan Financial Corporation, 612-928-5000/
 (MFC) CO: Metropolitan Financial Corporation ST: Minnesota IN: FIN SU: ERN


DS -- MN014 -- 0260 01/15/92 17:57 EST
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