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MICHIGAN BANKS REMAIN AMONG SAFEST AND SOUNDEST IN U.S.

 LANSING, Mich., March 9 /PRNewswire/ -- A study of the official call reports filed by Michigan's 217 commercial banks with their federal regulators shows that they continue to rank among the safest, soundest and most profitable banks in the entire United States.
 According to these reports, Michigan's banks earned $1,020,259,000 in 1992, or 1.02 percent of their total year-end assets of $100,200,324,000. A return on assets of 1 percent is the banking industry's "standard of excellence." This was the first time that Michigan banks earned more than $1 billion as well as the first time that their total assets exceeded $100 billion.
 The banks' primary capital, which is their shareholders' equity plus their reserves for loan losses, was 8.29 percent of total assets at the end of 1992. A ratio of 6 percent is considered adequate for most banks by their regulators.
 Only 1.44 percent of the loans held by Michigan banks are more than 90 days past due or not accruing interest. Any ratio of non-performing loans of less than 2 percent is considered a sign of a very good quality loan portfolio and any ratio of less than 4 percent is considered satisfactory.
 Richard F. Chormann, president and chief operating officer of First of America Bank Corporation in Kalamazoo and president of the Michigan Bankers Association, commented, "We are all quite proud of the condition and performance of Michigan's banking industry. According to the information available to us from earlier call report studies, it is possible that the banks in a few small, rural states might have performed as well or slightly better than Michigan banks in 1992. But we are confident that our state's banks outperformed the banks in all of the larger industrial states and have stronger capital positions and higher quality loan portfolios than the overwhelming majority of their peers in other parts of the country."
 He went on, "This means two things to the people of Michigan. First, they can do business with their local banks in every city and town in this state with complete confidence that their deposits will be safe and secure. And, second, it means that the banks of this state are well positioned to finance economic recovery and expansion as it occurs here.
 "It's been said," Chormann concluded, "that banks provide the essential lubricant that keeps the wheels of commerce and industry moving. In Michigan, fortunately, there is no shortage of that lubricant."
 In 1991, Michigan banks earned 1.01 percent on year-end assets of $98.8 billion. At the end of 1991, these institutions had a primary capital ratio of 7.78 percent of total assets and non-performing loans constituted 1.64 percent of total loans outstanding.
 Only five Michigan banks reported losing money in 1992. Three of them have been operating for less than three years and they were not expected to earn a profit so soon after opening for business.
 The call reports used in this study, which provide detailed information about each bank's assets, liabilities and operations as of Dec. 31, 1992, were filed with the regulatory agencies on Jan. 31, 1993. Copies of the reports were voluntarily given to the Michigan Bankers Association by the banks for analysis and inclusion in this study. They will be released to the public by the Federal Financial Institutions Examination Council sometime during the second quarter of the year.
 One small institution, Northern Michigan Bank in Escanaba, did not participate in the study. Because the bank holds less than .08 percent of the total assets held by all Michigan banks, inclusion of its data could not have had any effect on the study.
 All but two of the state's 217 full-service commercial banks are members of the Michigan Bankers Association. The association's principal activities involve government relations, conducting educational programs for bank employees and providing services such as employee benefit programs to its members.
 With one exception, the deposits in all Michigan banks are insured by the Federal Deposit Insurance Corporation. River Place Financial Corporation of Detroit does not do business with the public and its deposits are not insured.
 -0- 3/9/93
 /NOTE: Copies of a chart showing key balance sheet and income figures as well as performance ratios of all 216 reporting banks are immediately available by FAX transmission. For a copy, please call PR Newswire in Southfield, Mich. at 313-352-5200.
 Central Savings Bank, Sault Ste. Marie, reported non-performing loans of 4.04 percent of total loans. Virtually all of this bank's non- performing loans are guaranteed by the Farmers Home Administration, an agency of the U.S. government, and the bank will not suffer a loss on them. The loans are accruing a market rate of interest, the payment of which is guaranteed by the FmHA.
 The three banks less than three years old that reported 1992 losses are: Founders Trust Personal Bank in Grand Rapids, Paragon Bank in Holland and Alliance Banking Co. in New Buffalo.
 MFC First National Bank of Iron Mountain reported a 1992 loss. During 1992, this institution was restructured by its holding company parent, Michigan Financial Corporation of Marquette, and its main office was moved from Hermansville to a new facility in Iron Mountain.
 Bay Port State Bank was the fifth bank reporting a 1992 loss.
 First Independence National Bank of Detroit operated at the break- even point in 1992, reporting neither a profit nor a loss.
 There are three Michigan institutions with bank charters that do not accept deposits from the public or loan money. They are special purpose subsidiaries of NBD Bancorp, Incorporated; Comerica, Incorporated; and First Michigan Bank Corporation. Because of the nature of their operations, call report data from these institutions were not included in this study.
 CONTACT: Justin L. Moran, 313-884-6800, Richard F. Chormann, 616-376-7012, or Donald A. Booth, 517-485-3600, all of the Michigan Bankers Association/


CO: Michigan Bankers Association ST: Michigan IN: FIN SU: ECO

DH -- DE014 -- 4573 03/09/93 14:01 EST
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Date:Mar 9, 1993
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