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METROPOLITAN FINANCIAL REPORTS FIRST QUARTER RESULTS

    MINNEAPOLIS, April 22 /PRNewswire/ -- Metropolitan Financial Corporation (NYSE: MFC) today reported that earnings per share from continuing operations for the first quarter of 1993 were 74 percent higher than those reported one year ago.  The improvement was due to increased net interest income resulting from acquisition activity and a significant tax benefit which more than offset increased costs associated with acquisition integration and a one-time restructuring charge.
    Net income from continuing operations for the quarter ended March 31, 1993 totaled $16,979,000, or $0.59 per share, compared to $7,576,000, or $0.34 per share for the first quarter of 1992 from continuing operations and before the cumulative effect of an accounting change.
    Net income, inclusive of discontinued operations and an accounting change in 1992 was $15,287,000, or $0.53 per share, compared to $83,461,000, or $3.06 per share a year ago.  The most recent quarter includes a loss of $1,692,000, or $0.06 per share from discontinued operations related to the company's announcement earlier today that its board has approved a plan to spin-off the operations of Edina Realty and Equity Title in a tax-free distribution to shareholders.  The total reported for the three months ended March 31, 1992 included $75,507,000, or $2.78 per share resulting from the company's implementation of Statement of Financial Accounting Standard No. 109, "Accounting for Income Taxes (SFAS 109).
    Net interest income before the provision for credit losses for the quarter was $45,986,000, a 33 percent increase over the $34,346,000 reported for the first three months of 1992.  The increase reflected the acquisitions completed during the fourth quarter of 1992.  The net interest margin for the quarter was 3.26 percent, compared to the 2.96 percent reported for the first quarter of 1992 and the 3.11 percent reported for the three months ended Dec. 31, 1992  The net interest margin widened because of the continuing decline in the cost of funds and the company's increased capital base.
    Noninterest income for the quarter totaled $6,184,000, compared to $5,307,000 a year ago.  Net gain of sale of assets totaled $525,000 for the quarter, compared to $502,000 reported a year ago.  Mortgage loan servicing fee income for the quarter was $2,189,000, compared to a total for the first quarter of 1992 of $2,081,000.  Company officials noted that while the total was up from the previous year and up significantly from the quarter ended Dec. 31, 1992, the company was still experiencing accelerated prepayments in the mortgage loan servicing portfolio which depressed the income in the quarter.
    Noninterest expense for the quarter totaled $39,408,000, compared to $24,707,000 a year ago.  The increase reflects the two acquisitions completed during the fourth quarter of 1992 and two deposit and branch office acquisitions completed earlier that year.
    Noninterest expense for the first quarter of 1993 includes a restructuring charge of $3.5 million related to the closing of 17 retail bank offices and certain departmental realignments and cost-savings initiatives.  The restructuring of the retail bank office function, departmental realignments and other cost-savings initiatives are expected to result in an annual reduction of noninterest expense of $11.5 million, or $2,875,000 on a quarterly basis.
    In addition to the restructuring charge, noninterest expense in the first quarter includes costs of approximately $1.7 million associated with operational transitions following the late 1992 acquisitions of Security Financial Group, Home Owners Savings and American Charter Federal.  The company expects to eliminate such costs upon complete operational integration of these institutions into Metropolitan by the end of 1993.  Considering the effect of the restructuring charge and estimated cost savings resulting from the company's initiatives and the completion of operational transitions, the company expects noninterest expense to decrease by approximately $8 million per quarter as compared with the first quarter of 1993.
    Norman M. Jones, chairman of the board and chief executive officer, said, "Early this year we implemented a number of initiatives expected to result in significant cost savings and improving efficiency ratios. While those initiatives have had a negative effect on the expenses for this recent quarter, by the fourth quarter we expect the noninterest expense to asset ratio to be under 2.00 percent and the efficiency ratio, that is noninterest expense as a percent of net interest income and noninterest income, to be under 55 percent.  Those expected results would place us among the most efficient thrift institutions of our size in the country."
    The most recent quarter's totals include a tax benefit of $5,717,000, compared to a provision for taxes a year ago of $5,159,000. The benefit results from the favorable resolution of a number of outstanding tax issues raised by the Internal Revenue Service for which the company had earlier established reserves.
    Nonperforming assets at March 31, 1993 stood at $92,097,000, or 1.48 percent of assets, compared to $98,419,000, or 1.60 percent of assets, at Dec. 31, 1992.  The improvement in the credit quality enabled the company to reduce its provision for credit losses for the quarter to $1,500,000 from the $2,321,000 for the quarter ended March 31, 1992.
    The results of Edina Realty and Equity Title, now reported as discontinued operations, following today's earlier announcement, showed a net loss for the quarter of $1,192,000, as compared to net income of $378,000 one year ago.  In addition, the results of discontinued operations include a $465,000 charge for the estimated costs of completing the spin-off of these subsidiaries.  The decrease in operating income as compared to the first quarter of the previous year reflects the softer real estate market during the first six weeks of the 1993 quarter.  However, real estate sales transactions increased significantly during the second half of the quarter, therefore, the favorable results of these transactions are expected to be reflected in the company's second quarter results.
    Total assets at March 31, 1993 were $6.243 billion, up from the $6.147 billion reported at Dec. 31, 1992; and deposits totaled $5,103 billion, down slightly from the $5,207 billion reported at Dec. 31, 1992.  The quarter's earnings continued to enhance the regulatory capital of the insured savings bank subsidiary, Metropolitan Federal Bank, fsb.  Tangible capital to assets is now 6.85 percent, core capital is 7.38 percent and risk basded capital is 14.9 percent.
    Metropolitan Financial Corporation is a regional financial services holding company.  Its full service retail consumer savings bank, Metropolitan Federal Bank, fsb, Fargo, N.D., operates over 160 offices in the states of Minnesota, North Dakota, South Dakota, Nebraska, Iowa, Wisconsin and Arizona.
    The company also has two pending acquisitions in Kansas expected to close by mid-year: Western Financial Corporation, Overland Park, Kan., a $640 million thrift holding company that operates 24 savings bank branches through its Columbia Savings Association, F.A. subsidiary; and Eureka Savings Bank, Eureka, Kan., a $287 million savings bank, that operates 10 branch offices throughout the state.
    Metropolitan Financial Corporation's common stock trades on the New York Stock Exchange under the symbol MFC.
                   METROPOLITAN FINANCIAL CORPORATION
             Condensed Consolidated Statements of Condition
                             (In thousands)
                                               March 31,   Dec. 31,
                                                 1993        1992
                                              (Unaudited)
    Assets
     Cash and due from banks                     $82,990    $95,370
     Short term interest bearing deposits         82,669    157,489
      Assets held for sale
      (market: March 31, 1993-
      $116,023; Dec. 31, 1992-$162,30            114,803    162,304
     Investment securities (market:
      March 31, 1993-$227,143; Dec. 31,
      1992-$423,774)                             221,425    419,129
     Mortgage backed securities (market:
      March 31, 1993-$1,899,893
      Dec. 31, 1992-$1,632,794)                1,860,661  1,612,801
     Loans                                     3,473,409  3,267,131
     FHLB stock                                   58,551     64,096
     Accrued interest                             38,097     36,393
     Real estate (net of allowance)               50,325     51,915
     Office properties and equipment              72,939     71,955
     Goodwill                                     61,698     62,715
     Deferred taxes                               58,933     51,300
     Other assets                                 66,736     93,913
        Total Assets                          $6,243,236 $6,146,511
    Liabilities
     Transaction and passbook deposits        $1,445,750 $1,498,578
     Certificates                              3,657,374  3,708,447
     FHLB advances                               457,808    252,643
     Borrowings                                  143,693    166,343
     Accrued interest                             42,704     41,262
     Other liabilities                            53,993     52,594
        Total Liabilities                      5,801,322  5,719,867
    Shareholders' Equity
     Preferred stock                                   5          5
     Common stock, par value $.01 per share;
      authorized 60,000,000 shares;
      issued March 31, 1993-26,952,353 shares
      Dec. 31, 1992-26,718,855 shares                270        267
     Additional paid in capital                  151,919    148,890
     Retained earnings                           290,683    278,424
     Less cost of common stock in treasury
      87,041 shares at March 31, 1993;
      85,789 shares at Dec. 31, 1992                (963)      (942)
        Total Shareholders' Equity               441,914    426,644
        Total Liabilities and Shareholders'   $6,243,236 $6,146,511
                   METROPOLITAN FINANCIAL CORPORATION
            Selected Consolidated Operations Data and Ratios
          (Dollar amounts in thousands, except per share data)
                                                 Three Months Ended
                                               March 31,    March 31,
                                                 1993         1992
    Operations Data
     Interest income                          $112,063     $106,539
     Interest Expense                           66,077       72,083
        Net interest income                     45,986       34,456
       Provision for credit losses               1,500        2,321
       Net gain on sale of assets                  525          502
      Other noninterest income                   5,659        4,805
      Noninterest expense                       39,408       24,707
        Income before income taxes,
         discontinued operations and
         accounting change                      11,262       12,735
      Income taxes                              (5,717)       5,159
        Income from continuing operations       16,979        7,576
      Discontinued operations                   (1,692)         378
      Cumulative effect of accounting change         0       75,507
        Net Income                             $15,287      $83,461
    Earnings Per Share:
     Primary
      Income from continuing operation           $0.59        $0.34
      Discontinued operations                   $(0.06)       $0.02
      Cumulative effect of accounting            $0.00        $3.52
        Net Primary                              $0.53        $3.88
     Fully Diluted
      Income from continuing operation           $0.59        $0.27
      Discontinued operations                   $(0.06)       $0.01
      Cumulative effect of accounting            $0.00        $2.78
         Net Fully Diluted                       $0.53        $3.06
    Ratios (percents)
      Return on average assets
       before discontinued operations
       and accounting change                      1.11         0.60
      Return on average assets                    1.00         6.64
      Return on average equity
        before discontinued operations
        and accounting change                    16.50         8.97
      Return on average equity                   14.86        98.83
      Average equity to average assets            6.75         6.71
      Net interest margin                         3.26         2.96
      Noninterest expense/
        average assets                            2.59         1.96
      Nonperforming assets to
        total assets                              1.48         1.88
                                                    March 31, 1993
    Financial Condition
      Total assets                                   $6,243,236
      Loans(includes held for sale)                   3,578,904
      Deposits                                        5,103,124
      Shareholders' equity                              441,914
      Nonperforming assets                               92,097
      Book value per common share                         15.99
      Tangible book value per
       common share                                       13.70
      Market value per common share                       19.88
    Capitalization Metropolitan Federal Bank, fsb
      Tangible capital (pct.)                              6.85
      Core capital (pct.)                                  7.38
      Risk based capital (pct.)                           14.90
                   METROPOLITAN FINANCIAL CORPORATION
              Condensed Consolidated Statements of Income
                             (In thousands)
                              (Unaudited)
                                                    Three Months Ended
                                                  March 31,   March 31,
                                                    1993        1992
    INTEREST INCOME
     Loans                                        $74,557     $64,469
     Mortgage backed securities                    32,169      38,412
     Investments                                    5,337       3,658
    --                                            112,063     106,539
    INTEREST EXPENSE
     Transaction and passbook deposits              8,038       9,644
     Certificates                                  51,080      51,739
     FHLB advances                                  3,628       9,419
     Borrowings                                     3,331       1,281
    --                                             66,077      72,083
    NET INTEREST INCOME                            45,986      34,456
    Provision for credit losses                     1,500       2,321
      NET INTEREST INCOME AFTER
       PROVISION FOR CREDIT LOSSES                 44,486      32,135
    NONINTEREST INCOME
     Net gain on sale of assets                       525         502
     Mortgage loan servicing fees                   2,189       2,081
     Service charges on deposit accounts            1,885       1,636
     Other                                          1,585       1,088
     --                                             6,184       5,307
    NONINTEREST EXPENSE
     Compensation & related items                  15,827       9,743
     Occupancy                                      3,955       2,280
     Data processing                                2,697       1,619
     Advertising                                    1,532       1,196
     Deposit insurance premium                      2,372       2,227
     Amortization of goodwill                         822         839
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Date:Apr 22, 1993
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