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MICHIGAN NATIONAL'S EARNINGS FOR THE SECOND QUARTER 1992 SIGNIFICANTLY IMPROVED FROM THE SAME PERIOD LAST YEAR

 MICHIGAN NATIONAL'S EARNINGS FOR THE SECOND QUARTER 1992
 SIGNIFICANTLY IMPROVED FROM THE SAME PERIOD LAST YEAR
 FARMINGTON HILLS, Mich., July 15 /PRNewswire/ -- Michigan National Corporation (NASDAQ-NMS: MNCO) today reported net income of $15.6 million, or $1.04 per share, for the three months ended June 30, 1992. The second-quarter earnings were 45 percent higher than earnings of $10.8 million, or $.73 per share, for last year's second quarter. Net income for the first six months of 1992 was $29.9 million, or $1.99 per share, compared to $13.2 million, or $.89 per share, for the same period last year.
 Contributing to the earnings improvement for the three and six months ended June 30, 1992, compared to the same periods last year were: increases in net interest income of $6.1 million and $18.6 million, respectively; decreases in the provision for possible loan losses of $9.3 million and $18.2 million, respectively; increases in non-interest income of $9.1 million and $17.9 million, respectively; partially offset by increases in non-interest expense of $16.4 million and $30.5 million, respectively, and increases in the effective income tax rate.
 The provision for possible loan losses was $18.4 million for the second quarter 1992 and $36.8 million for the first six months, compared to $27.7 million and $54.9 million for the comparable periods last year. The allowance for loan losses increased to $165.7 million from $158.3 million at June 30, 1991. Net charge-offs for the first six months of 1992 were $25.7 million compared to $33.9 million for the same period last year. The allowance as a percentage of total loans improved to 2.50 percent at June 30, 1992, from 2.37 percent at March 31, 1992 and 2.38 percent at June 30, 1991. The allowance as a percentage of non-performing loans was unchanged from March 31, 1992 at 91.20 percent, but improved from 68.36 percent at June 30, 1991. Non-performing loans were $181.7 million, or 2.74 percent of total loans, down from $231.5 million, or 3.48 percent of total loans, a year ago. Total non- performing assets also declined from year-ago levels to $326.4 million from $340.0 million. Total non-performing assets declined modestly from $329.2 million, and non-performing loans rose slightly from $177.9 million at March 31, 1992.
 Commenting on loan quality, Chairman and Chief Executive Officer Robert J. Mylod said, "The corporation remains concerned about the possible future effects of a continued soft economy on its performing loan portfolios. Management identifies performing loans where the borrower's operating results are showing signs of current or possible future financial difficulties. These loans are subjected to closer and more frequent risk assessment reviews. During the second quarter, loans in this category increased to $694 million from $676 million at March 31, 1992. Such increases are not unusual during economic recessionary periods and are expected to begin decreasing as the economy improves."
 Commenting further on earnings for the quarter, Mylod said, "With the exception of the commercial banking business which is hampered by its exposure to commercial real estate, the corporation's core businesses continue to show improved earnings performance. The commercial banking business continues to focus its efforts on managing the reduction of its commercial real estate loan portfolios. The total outstanding balance in these portfolios was $1,456 million at June 30, 1992, a $304.5 million reduction from year-ago levels. The effect of this decrease on net interest income was offset by increases in the portfolio of residential mortgages held for sale and an approximate $200 million mortgage warehouse loan portfolio acquired in the April 1992 acquisition of First Collateral Services."
 Mylod added, "Growth in the off-balance sheet portfolios of fee generating assets in the corporation's investment services business and residential mortgage banking business is contributing to increases in non-interest income. Non-interest income was $51.5 million for the second quarter 1992, a 21-percent increase over last year's second quarter, and $103.2 million for the first six months of 1992 (excluding securities gains of $1.9 million in the first quarter 1992), an 18-percent increase from the same period last year."
 Investment services fee generating assets have grown from $3.8 billion at June 30, 1991, to $5.2 billion at June 30, 1992, a 36-percent increase. The fee income generated by this portfolio was $4.2 million for the second quarter 1992, a 9-percent increase from last year's second quarter and $8.9 million for the first six months of 1992, a 13-percent increase from the same period last year.
 Interest rates have dropped dramatically since late 1991, resulting in extraordinary increases in the volume of residential mortgage loan refinancing activity (both loan payoffs and new loan originations). This activity is, and will continue to be positive in terms of servicing portfolio growth. The corporation's mortgage banking subsidiary, Independence One Mortgage Corporation (IOMC), was servicing $14.5 billion in residential mortgage loans at June 30, 1992, a net growth of 11 percent from June 30, 1991. Mortgage servicing fee income for the second quarter 1992 was $14.3 million, a 14-percent increase from last year's second quarter, and $29.4 million for the first six months of 1992, a 21-percent increase from the same period last year.
 The corporation's newly acquired businesses contributed $1.5 million to the increase in non-interest income in the second quarter 1992, and $2.5 million for the first six months of 1992. (The newly acquired businesses are: Lockwood Banc Group, Inc., a Houston bank acquired Oct. 31, 1991; Independence One Asset Management, an RTC asset management business formed during the fourth quarter 1991; and First Collateral Services, a mortgage warehouse lending business acquired in April 1992.) In addition, trading profits were $3.7 million higher for the second quarter 1992 than for last year's second quarter, and $2.2 million higher for the six months ended June 30, 1992, compared to last year.
 Non-interest expenses for the second quarter 1992 were $112.3 million and for the first six months were $224.9 million. This compares to $92.9 million and $191.5 million (excluding a one-time intangible write-down of $2.9 million in the second quarter 1991), respectively, for the same periods last year. The net growth in servicing portfolio was the principal contributor to an approximate $9.7 million increase in total non-interest expenses at IOMC in the second quarter 1992 compared to last year, and an $18.5 million increase for the first six months of 1992 compared to last year. This increased expense base at IOMC will enhance future net servicing income. The corporation's newly acquired businesses accounted for $3.6 million of the increase in the corporation's non-interest expenses for the second quarter 1992, and $5.9 million of the increase for the first six months of 1992. In addition, defaulted loan expenses were $2.6 million higher for the second quarter 1992 compared to last year's second quarter, and $.6 million higher for the six months ended June 30, 1992, compared to last year. Personnel costs (excluding IOMC and newly acquired businesses) increased $3.1 million for the second quarter 1992 compared to last year's second quarter, and $6.2 million for the first six months of 1992 compared to last year. These increases in personnel costs were primarily attributable to annual merit and promotional salary increases.
 The corporation's effective tax rate for the second quarter and first six months of 1992 is 27 percent, compared to 20 percent for the same periods last year. The increase in the effective tax rate is due to a reduction in the amount of deferred tax benefits that the corporation can recognize for financial reporting purposes.
 Michigan National Corporation is a diversified financial services corporation with total assets of $10.6 billion. It is a bank holding company and a savings and loan holding company.
 MICHIGAN NATIONAL CORPORATION AND SUBSIDIARIES
 CONSOLIDATED FINANCIAL HIGHLIGHTS
 (Unaudited)
 Three Months Ended
 June 30, March 31, June 30,
 1992 1992 1991
 Quarter to Date
 (In thousands)
 Interest income $199,971 $201,536 $230,123
 Interest expense 99,258 105,045 135,478
 Net interest income 100,713 96,491 94,645
 Provision for possible
 credit losses 18,418 18,364 27,680
 Non-interest income 51,462 53,646 42,359
 Non-interest expense 112,291 112,624 95,849
 Income before income tax expense 21,466 19,149 13,475
 Income tax provision (benefit) 5,863 4,847 2,701
 Net income $15,603 $14,302 $10,774
 Per Common Share
 Net income - primary $1.04 $0.95 $0.73
 Net income - fully diluted $1.04 $0.95 $0.73
 Average shares outstanding
 - primary 15,049 14,997 14,832
 Average shares outstanding
 - fully diluted 15,048 15,048 14,847
 Cash dividends declared $0.50 $0.50 $0.50
 Book value end of period $52.31 $51.92 $49.81
 Market value end of period $46 1/4 $51 1/4 $27 1/2
 Market value: High $51 $52 $29 3/4
 Market value: Low $44 $40 1/4 $21 1/4
 Selected Period-End Balances
 (In millions)
 Total assets $10,635 $10,909 $10,708
 Earning assets 9,633 9,813 9,661
 Total loans and lease financing 6,620 6,744 6,654
 Non-performing assets 326 329 340
 Deposits 8,638 8,936 8,582
 Long-term debt 92 90 95
 Shareholders' equity 778 768 735
 Selected Quarter-to-Date Average Balances
 (In millions)
 Total assets 10,789 10,589 10,504
 Earning assets 9,768 9,547 9,594
 Total loans and lease financing 6,786 6,716 6,635
 Deposits 8,852 8,677 8,638
 Long-term debt 95 90 96
 Shareholders' equity 774 766 737
 Selected Financial Ratios (percents)
 Return on average
 shareholders' equity 8.07 7.47 5.85
 Return on average total assets 0.58 0.54 0.41
 Average equity to average
 total assets 7.17 7.23 7.02
 Allowance to period-end loans 2.50 2.37 2.38
 Non-performing assets to period-end
 loans plus property from
 defaulted loans 4.82 4.77 5.03
 Net interest spread 3.73 3.69 3.60
 Net interest margin 4.49 4.45 4.51
 Equity to asset ratio 7.32 7.04 6.86
 Primary capital ratio 9.47 9.09 8.94
 Leverage ratio 7.01 7.10 6.88
 Tier 1 risk-based capital ratio 9.80 9.56 9.13
 Total risk-based capital ratio 12.08 11.83 11.39
 Dividend payout ratio 48.08 52.63 68.49
 MICHIGAN NATIONAL CORPORATION AND SUBSIDIARIES
 CONSOLIDATED FINANCIAL HIGHLIGHTS
 (Unaudited)
 Six Months Ended
 June 30,
 1992 1991
 Year to Date
 (In thousands)
 Interest income $401,507 $464,420
 Interest expense 204,303 285,832
 Net interest income 197,204 178,588
 Provision for possible credit losses 36,782 54,944
 Non-interest income 105,108 87,163
 Non-interest expense 224,915 194,356
 Income before income tax expense 40,615 16,451
 Income tax provision (benefit) 10,710 3,290
 Net income $29,905 $13,161
 Per Common Share
 Net income - primary $1.99 $0.89
 Net income - fully diluted $1.99 $0.89
 Average shares outstanding - primary 15,028 14,801
 Average shares outstanding - fully diluted 15,035 14,843
 Cash dividends declared $1.00 $1.00
 Book value end of period $52.31 $49.81
 Market value end of period $46 1/4 $27 1/2
 Market value: High $51 1/4 $29 3/4
 Market value: Low $42 $14 3/4
 Selected Period-End Balances
 (In millions)
 Total assets $10,635 $10,708
 Earning assets 9,633 9,661
 Total loans and lease financing 6,620 6,654
 Non-performing assets 326 340
 Deposits 8,638 8,582
 Long-term debt 92 95
 Shareholders' equity 778 735
 Selected Year-to-Date Average Balances
 (In millions)
 Total assets $10,689 $10,646
 Earning assets 9,657 9,703
 Total loans and lease financing 6,751 6,657
 Deposits 8,764 8,727
 Long-term debt 93 97
 Shareholders' equity 770 737
 Selected Financial Ratios (percents)
 Return on average shareholders' equity 7.77 3.57
 Return on average total assets 0.56 0.25
 Average equity to average total assets 7.20 6.92
 Allowance to period-end loans 2.50 2.38
 Non-performing assets to period-end loans
 plus property from defaulted loans 4.82 5.03
 Net interest spread 3.71 3.41
 Net interest margin 4.47 4.31
 Equity to asset ratio 7.32 6.86
 Primary capital ratio 9.47 8.94
 Leverage ratio 7.01 6.88
 Tier 1 risk-based capital ratio 9.80 9.13
 Total risk-based capital ratio 12.08 11.39
 Dividend payout ratio 50.25 112.36
 -0- 7/15/92
 /CONTACT: Ariadne Magoulias, 313-473-3428, or Vernon Patterson, investor relations, 313-473-3076, both of Michigan National Corporation/
 (MNCO) CO: Michigan National Corporation ST: Michigan IN: FIN SU: ERN


JG-SB -- DE014 -- 9685 07/15/92 15:56 EDT
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