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MICHIGAN NATIONAL'S EARNINGS FOR THE YEAR 1991 WERE MODESTLY HIGHER THAN 1990

 MICHIGAN NATIONAL'S EARNINGS FOR THE YEAR 1991
 WERE MODESTLY HIGHER THAN 1990
 FARMINGTON HILLS, Mich., Jan. 15 /PRNewswire/ -- Michigan National Corporation's (NASDAQ-NMS: MNCO) net income for the year ended Dec. 31, 1991, was $50.1 million, or $3.36 per share. This compares to $48.0 million, or $3.21 per share, for the year 1990. Net income for the three months ended Dec. 31, 1991, was $18.6 million, or $1.24 per share, compared to $18.3 million, or $1.23 per share, for the prior quarter and $2.6 million, or $.18 per share, for the same period last year.
 Commenting on results for the year, Chairman and Chief Executive Officer Robert J. Mylod said, "During 1991, the corporation continued its efforts toward maintaining balance sheet strength. The general economy showed few signs of recovery during 1991 and this continuing uncertainty intensified the importance of strengthening the allowance for possible loan loss. This was achieved in part through higher loan loss provisions as well as through significant reductions in the higher risk commercial real estate construction and mortgage loan portfolios. As a result, the allowance as a percentage of non-performing loans and as a percentage of total loans, increased from Dec. 31, 1990, levels."
 The provision for possible loan loss was $86.5 million for the year 1991, an increase of $13.4 million from 1990. The allowance for possible loan loss was $154.6 million at Dec. 31, 1991, a $17.5 million increase from Dec. 31, 1990. As a percentage of total loans, the allowance was 2.35 percent at year end 1991 compared to 2.02 percent last year. The allowance as a percentage of non-performing loans increased to 82.8 percent at Dec. 31, 1991, from 78.8 percent at Dec. 31, 1990.
 The corporation experienced an increase in total non-performing assets from $307.8 million at Dec. 31, 1990, to a high of $348.3 million at March 31, 1991. Since that date, total non-performing asset levels have fallen to $329.2 million at Dec. 31, 1991.
 During the year 1991, the corporation's commercial real estate construction loan portfolio decreased $185.8 million to $335.7 million and commercial real estate mortgages decreased $72.6 million to $1.26 billion. Construction loans as a percentage of total loans declined to 5.1 percent at Dec. 31, 1991, from a high of 10.0 percent at year end 1989.
 Commenting further, Mylod said, "The corporation remains concerned about the general economic outlook, particularly the automotive sector and the depressed commercial real estate markets and their possible effects on future earnings. The corporation has experienced an increase in the number of loans where the borrowers' operating results are showing signs of difficulty. During the fourth quarter 1991, this trend began leveling off. However, if current unfavorable economic conditions continue, further deterioration in borrowers' financial conditions could move these performing loans toward a non-performing status."
 Regarding the corporation's earnings for 1991, Mylod added, "Net income for the year reflected general improvement in the net interest margin and in non-interest income and expenses. The net interest margin percentage for the year was 4.37 percent, compared to 4.05 percent for 1990. The unusually wide spread that existed during 1991 between the prime interest rate and money market rates and effective asset/liability management strategies were primary reasons for the improvement in the net interest margin. Loan and deposit pricing programs also contributed to a stronger net interest margin. The corporation's net overhead (operating expense less operating income) decreased $4.4 million for the year ended Dec. 31, 1991, compared to the year ended 1990. The net overhead as a percentage of average earning assets increased to 2.29 percent for the year 1991 from 2.16 percent for 1990. This increase is entirely attributable to a lower level of average earning assets which is a result of the aforementioned balance sheet strengthening activities."
 Other operating income for the year ended Dec. 31, 1991, was $190.0 million, an 8.14-percent increase over last year's $175.7 million. The increases have occurred in the corporation's core businesses, particularly the mortgage banking business, as a result of favorable pricing strategies and volume increases.
 Operating expenses for the year ended Dec. 31, 1991, include one- time charges of $9.3 million. In addition, other operating expenses for the year 1991 include $6.8 million in FDIC insurance rate increases and a $2.0 million increase in defaulted loan expense as compared to last year. All other operating expenses for the year ended Dec. 31, 1991, totaled $367.0 million, an $8.2 million decrease compared to 1990.
 The one-time charges referred to above include a write-off of intangible assets totaling $8.1 million. The intangible assets were acquired in connection with the 1988 acquisition of Independence One Financial Services (IOFS) (a second mortgage, commercial real estate lending business conducted in the northeastern U.S.). The corporation has significantly reduced its commitment to that market because of the severely depressed real estate industry. In addition to the intangibles write-off, other one-time costs of $1.2 million associated with the closing of the IOFS office were recognized during the fourth quarter 1991.
 Net income for the fourth quarter 1991 was $18.6 million, or $1.24 per share, compared to $18.3 million, or $1.23 per share, for the third quarter 1991 and $2.6 million, or $.18 per share, for the fourth quarter 1990. The increase in net income over fourth quarter 1990 was primarily attributable to a decrease in the provision for possible loan loss which was $30.0 million in the fourth quarter 1990, compared to $16.5 million this year. The net interest margin percentage for the fourth quarter 1991 increased to 4.42 percent from 4.18 percent for the same period last year, principally due to the favorable interest rate environment during 1991. The net interest margin for the fourth quarter 1991 was lower than the 4.46-percent margin earned in the third quarter 1991 largely due to the reduction in prime interest rates during the quarter ended Dec. 31, 1991.
 Other operating income was slightly higher in the fourth quarter 1991 as compared to the fourth quarter 1990. Compared to the third quarter 1991, other operating income increased $5.9 million, due to an increase in mortgage banking gains from the sale of servicing rights and the sale of loans. Other operating expenses were slightly lower than the fourth quarter 1990. Compared to the third quarter 1991, other operating expenses (excluding the $5.1 million one-time charge in the third quarter 1991 and the $1.2 million charge in the fourth quarter 1991) increased $7.4 million. The increases in the fourth-quarter expenses compared to the third quarter were attributable in part to a $1.3 million increase in defaulted loan expense and $1.5 million of expenses at Lockwood Banc Group, Inc. which was acquired during the fourth quarter. Other increases were principally attributable to an increase in the amortization of purchased servicing due to additional purchases and accelerated prepayments, promotional programs and annual customer reporting requirements, and other miscellaneous expenses.
 Michigan National Corporation is a diversified financial services corporation with total assets at Dec. 31, 1991, of $10.6 billion. It is a bank holding company and a savings and loan holding company.
 Other key financial information is set forth in the following schedules:
 MICHIGAN NATIONAL CORPORATION AND SUBSIDIARIES
 FINANCIAL HIGHLIGHTS (Unaudited)
 Dec. 31, 1991
 Percent
 12 Months Ended Dec. 31 1991 1990 Change
 Operating Results (in thousands)
 Net interest income (FTE) $420,999 $422,253 (0)
 Net interest income 368,999 355,750 4
 Provision for possible credit
 losses 86,500 73,082 18
 Other operating income 190,039 175,742 8
 Other operating expense 410,836 400,917 2
 Income before income taxes 61,702 57,493 7
 Income tax provision 11,612 9,479 23
 Net income 50,090 48,014 4
 Per Common Share
 Net income:
 Primary $3.36 $3.21 5
 Fully diluted $3.36 $3.21 5
 Average common shares outstanding:
 Primary 14,858 14,977 (1)
 Fully diluted 14,957 14,977 (0)
 Book value, end of period $51.50 $49.93 3
 Market value, end of period $41.50 $16.75 148
 Cash dividends declared $2.00 $2.00 0
 Financial Ratios
 Net interest margin (FTE) 4.37 pct. 4.05 pct. 8
 Overhead to average earning
 assets (annualized) 2.29 pct. 2.16 pct. 6
 Return on average total
 assets (annualized) 0.47 pct. 0.42 pct. 12
 Return on average equity
 (annualized) 6.74 pct. 6.49 pct. 4
 (FTE) -- Fully taxable equivalent.
 (NOTE) -- Certain prior-year amounts have been reclassified to conform to current-year presentation.
 MICHIGAN NATIONAL CORPORATION AND SUBSIDIARIES
 FINANCIAL HIGHLIGHTS (Unaudited)
 Dec. 31, 1991
 Percent
 Three Months Ended Dec. 31 1991 1990 Change
 Operating Results (in thousands)
 Net interest income (FTE) $106,519 $105,623 1
 Net interest income 95,067 87,869 8
 Provision for possible credit
 losses 16,556 30,000 (45)
 Other operating income 54,407 53,987 1
 Other operating expense 109,995 110,237 (0)
 Income before income taxes 22,923 1,619 1,316
 Income tax provision (credit) 4,322 (1,018) (525)
 Net income 18,601 2,637 605
 Per Common Share
 Net income:
 Primary $1.24 $0.18 589
 Fully diluted $1.24 $0.18 589
 Average common shares outstanding:
 Primary 14,915 14,764 1
 Fully diluted 14,953 14,764 1
 Book value, end of period $51.50 $49.93 3
 Market value, end of period $41.50 $16.75 148
 Cash dividends declared $0.50 $0.50 0
 Financial Ratios
 Net interest margin (FTE) 4.42 pct. 4.18 pct. 6
 Overhead to average earning
 assets (annualized) 2.32 pct. 2.24 pct. 4
 Return on average total
 assets (annualized) 0.70 pct. 0.10 pct. 600
 Return on average equity
 (annualized) 9.85 pct. 1.42 pct. 594
 (FTE) -- Fully taxable equivalent.
 (NOTE) -- Certain prior-year amounts have been reclassified to conform to current-year presentation.
 MICHIGAN NATIONAL CORPORATION AND SUBSIDIARIES
 FINANCIAL HIGHLIGHTS (Unaudited)
 Dec. 31, 1991
 Percent
 Dec. 31 1991 1990 Change
 End of Period (in thousands)
 Total assets $10,650,231 $10,955,873 (3)
 Total earning assets 9,548,020 9,940,841 (4)
 Total loans & lease financing 6,587,768 6,783,956 (3)
 Allowance for possible
 credit losses 154,638 137,200 13
 Total deposits 8,655,477 9,017,729 (4)
 Shareholders' equity 759,898 736,020 3
 Primary capital 994,035 951,367 4
 Total capital 995,035 952,867 4
 Total risk-based capital 925,035 900,642 3
 Year-to-Date Average Balances (in thousands)
 Total assets $10,579,563 $11,377,346 (7)
 Total earning assets 9,625,849 10,416,216 (8)
 Total loans & lease financing 6,592,602 6,969,294 (5)
 Total deposits 8,657,151 9,078,901 (5)
 Shareholders' equity 743,502 740,164 0
 Loan Quality
 Allowance/total loans 2.35 pct. 2.02 pct. 16
 Non-performing loans/total loans 2.84 pct. 2.57 pct. 11
 Allowance/non-performing loans 82.77 pct. 78.82 pct. 5
 Capital Ratios
 Equity/total assets 7.14 pct. 6.72 pct. 6
 Primary capital/total assets 9.20 pct. 8.58 pct. 7
 Total capital/total assets 9.21 pct. 8.59 pct. 7
 Tier 1 capital/risk-weighted assets 9.50 pct. 8.75 pct. 9
 Total capital/risk-weighted assets 11.72 pct. 10.96 pct. 7
 Leverage ratio 7.08 pct. 6.66 pct. 6
 -0- 1/15/92
 /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 -- DE018 -- 0119 01/15/92 15:40 EST
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