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MICHIGAN NATIONAL CORP. RESTATES SECOND AND THIRD QUARTER EARNINGS TO BE SUBSTANTIALLY OFFSET BY INCREASE IN FOURTH QUARTER EARNINGS

 FARMINGTON HILLS, Mich., Jan. 10 /PRNewswire/ -- Michigan National Corporation (NASDAQ-NMS: MNCO) today announced that earnings for the second and third quarters are being restated downward by $7.2 million and $2.1 million, respectively. These adjustments result from a postponement, for accounting purposes, of a sale of $2.2 billion of mortgage servicing rights from June to November of 1993.
 The Company, with the concurrence of its independent public accountants, Deloitte & Touche, had concluded that the transaction should be accounted for as a sale in the second quarter. The transfer of the economic benefits did, in fact, take place in June when the transaction was consummated.
 However, upon a recent re-evaluation, it was determined that the sale could not be recorded until certain contingencies were eliminated in November.
 In announcing the restatement, Robert J. Mylod, Chairman and Chief Executive Officer, said that, "While this restatement is necessary, substantively it is largely an issue of timing.
 The sale was advantageous to the Company, both in terms of the gain on sale and avoidance of further losses associated with purchased mortgage servicing rights." He further added that, "The Company expects to announce fourth quarter earnings on January 19, 1994, which will be in line with the Company's forecast for the quarter. Inclusion of the gain on the sale of the mortgage servicing rights of $2.2 billion will now increase fourth quarter earnings by approximately $7.8 million. Additionally, approximately $1.5 million of gain associated with this sale is being deferred until certain other contingencies are eliminated on June 30, 1996."
 Michigan National Corporation is a diversified financial services corporation with total assets of $10.4 billion. It is a bank holding company and a savings and loan holding company.
 (Other key financial data is set forth in the attached schedules.)
 CONSOLIDATED FINANCIAL HIGHLIGHTS Michigan National Corporation
 (UNAUDITED) and Subsidiaries
 THREE MONTHS ENDED
 -------------------------------------------------------------------
 9/30/93 6/30/93 9/30/92
 RESTATED RESTATED
 -------------------------------------------------------------------
 OPERATING RESULTS (IN THOUSANDS)
 Interest income $176,053 $177,591 $190,379
 Interest expense 72,646 73,682 89,385
 -------------------------------------------------------------------
 Net interest income 103,407 103,909 100,994
 Provision for possible credit losses 8,000 12,494 18,571
 Non-interest income 65,966 55,674 52,859
 Non-interest expense 135,852 138,187 122,651
 -------------------------------------------------------------------
 Income (loss) before income tax expense 25,521 8,902 12,631
 Income tax provision (benefit) (1,506) 0 1,078
 -------------------------------------------------------------------
 Income (loss) before cumulative effect
 of a change in accounting principle 27,027 8,902 11,553
 Cumulative effect of a change
 in accounting principle
 -------------------------------------------------------------------
 Net income (loss) $27,027 $8,902 $11,553
 ===================================================================
 PER COMMON SHARE
 Income (loss) before cumulative effect
 of a change in accounting principle $1.77 $0.58 $0.76
 Cumulative effect of a change
 in accounting principle
 Net income (loss) $1.77 $0.58 $0.76
 Cash dividends declared $0.50 $0.50 $0.50
 Book value end-of-period $51.66 $50.19 $53.51
 Market value end-of-period $58.88 $56.50 $44.00
 Closing market value: high $59.88 $61.63 $50.38
 Closing market value: low $54.50 $52.00 $43.50
 ===================================================================
 SELECTED PERIOD-END BALANCES (IN MILLIONS)
 Total assets $10,395 $10,517 $10,705
 Earning assets 8,932 9,388 9,507
 Total loans and lease financing,
 net of unearned income 6,697 6,929 6,788
 Non-performing assets 276 290 309
 Deposits 8,555 8,613 8,699
 Long-term debt 78 81 83
 Shareholders' equity 781 759 798
 ===================================================================
 CONSOLIDATED FINANCIAL HIGHLIGHTS Michigan National Corporation
 (UNAUDITED) and Subsidiaries
 -------------------------------------------------------------------
 THREE MONTHS ENDED
 -------------------------------------------------------------------
 9/30/93 6/30/93 9/30/92
 RESTATED RESTATED
 -------------------------------------------------------------------
 SELECTED AVERAGE BALANCES (IN MILLIONS)
 Total assets $10,390 $10,372 $10,471
 Earning assets 9,292 9,255 9,405
 Total loans and lease financing,
 net of unearned income 6,880 6,742 6,560
 Deposits 8,610 8,718 8,687
 Long-term debt 79 82 88
 Shareholders' equity 770 766 801
 ===================================================================
 SELECTED FINANCIAL RATIOS
 Return on average shareholders' equity 14.04% 4.65% 5.77%
 Return on average total assets 1.04 0.34 0.44
 Average equity to average total assets 7.41 7.38 7.65
 Allowance to period-end loans 2.82 2.68 2.56
 Non-performing assets to period-end loans (net
 of unearned income) plus property from defaulted
 loans and other REO, net 4.05 4.11 4.44
 Net interest spread 3.84 3.95 3.87
 Net interest margin 4.65 4.74 4.62
 Equity to asset ratio (period end) 7.51 7.22 7.45
 Leverage ratio 7.09 6.90 7.27
 Tier 1 risk based capital ratio 9.01 8.79 9.54
 Total risk based capital ratio 11.16 10.99 11.76
 Dividend payout ratio 28.25 86.21 65.79
 ===================================================================
 Certain prior period amounts have been restated to conform to
 current period presentation.
 CONSOLIDATED FINANCIAL HIGHLIGHTS Michigan National Corporation
 (UNAUDITED) and Subsidiaries
 ---------------------------------------------------------
 NINE MONTHS ENDED
 ---------------------------------------------------------
 9/30/93 9/30/92
 RESTATED
 ---------------------------------------------------------
 OPERATING RESULTS (IN THOUSANDS)
 Interest income $524,789 $591,886
 Interest expense 225,009 293,688
 ---------------------------------------------------------
 Net interest income 299,780 298,198
 Provision for possible credit losses 33,000 55,353
 Non-interest income 173,067 157,967
 Non-interest expense 450,222 347,566
 ---------------------------------------------------------
 Income (loss) before income tax expense(10,375) 53,246
 Income tax provision (benefit) (1,506) 5,330
 ---------------------------------------------------------
 Income (loss) before cumulative effect
 of a change in accounting principle (8,869) 47,916
 Cumulative effect of a change
 in accounting principle 6,265
 ---------------------------------------------------------
 Net income (loss) ($8,869) $54,181
 =========================================================
 PER COMMON SHARE
 Income (loss) before cumulative effect
 of a change in accounting principle $0.24 $3.18
 Cumulative effect of a change
 in accounting principle $0.42
 Net income (loss) $0.24 $3.60
 Cash dividends declared $1.50 $1.50
 Book value end-of-period $51.66 $53.51
 Market value end-of-period $58.88 $44.00
 Closing market value: high $64.25 $51.25
 Closing market value: low $50.00 $42.00
 =========================================================
 SELECTED PERIOD-END BALANCES (IN MILLIONS)
 Total assets $10,395 $10,705
 Earning assets 8,932 9,507
 Total loans and lease financing,
 net of unearned income 6,697 6,788
 Non-performing assets 276 309
 Deposits 8,555 8,699
 Long-term debt 78 83
 Shareholders' equity 781 798
 =========================================================
 CONSOLIDATED FINANCIAL HIGHLIGHTS Michigan National Corporation
 (UNAUDITED) and Subsidiaries
 ---------------------------------------------------------
 NINE MONTHS ENDED
 ---------------------------------------------------------
 9/30/93 9/30/92
 RESTATED
 ---------------------------------------------------------
 SELECTED AVERAGE BALANCES (IN MILLIONS)
 Total assets $10,306 $10,633
 Earning assets 9,221 9,573
 Total loans and lease financing,
 net of unearned income 6,700 6,687
 Deposits 8,616 8,738
 Long-term debt 81 91
 Shareholders' equity 782 786
 =========================================================
 SELECTED FINANCIAL RATIOS
 Return on average shareholders' equity (1.51)% 9.19%
 Return on average total assets (0.11) 0.68
 Average equity to average total assets 7.58 7.39
 Allowance to period-end loans 2.82 2.56
 Non-performing assets to period-end loans (net
 of unearned income) plus property from defaulted
 loans and other REO, net 4.05 4.44
 Net interest spread 3.82 3.76
 Net interest margin 4.59 4.52
 Equity to asset ratio (period end) 7.51 7.45
 Leverage ratio 7.09 7.27
 Tier 1 risk based capital ratio 9.01 9.54
 Total risk based capital ratio 11.16 11.76
 Dividend payout ratio N/M 41.67
 =========================================================
 Certain prior period amounts have been restated to conform to
 current period presentation.
 N/M = Not meaningful
 -0- 1/10/94 R
 /CONTACT: Robert V. Panizzi, 810-473-3240, or Vern Patterson 810-473-3076, both of Michigan National/
 (MNCO)


CO: Michigan National Corporation ST: Michigan IN: FIN SU: ERP

OP -- DE007R -- 0641 01/10/94 15:04 EST
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Date:Jan 10, 1994
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