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MICHIGAN NATIONAL REPORTS THIRD QUARTER EARNINGS OF $29.2 MILLION; A SUBSTANTIAL INCREASE OVER LAST YEAR'S THIRD QUARTER

 FARMINGTON HILLS, Mich., Oct. 20 /PRNewswire/ -- Michigan National Corporation (NASDAQ-NMS: MNCO) today announced earnings for the third quarter of $29.2 million, or $1.86 per share, which includes a one-time pre-tax gain of $10.1 million. Net income for the same period last year was $11.6 million, or $0.76 per share.
 A major contributor to the increase in earnings is a sustained trend of improvement in credit quality over the past 15 months. This resulted in a $10.6 million decrease in the provision for possible credit losses to $8.0 million in the third quarter 1993 from $18.6 million in the third quarter 1992. At Sept. 30, 1993, performing watch credits were $450 million, down $244 million, or 35 percent, from a high of $694 million at June 30, 1992; and total non-performing assets were $276 million, down $48 million, or 15 percent from $324 million at June 30, 1992. Net charge-offs for the nine months ended Sept. 30, 1993, were $20.3 million, down $18.2 million, or 47 percent, from the same period last year. In addition, the allowance for possible credit losses as a percentage of total loans increased to 2.82 percent at Sept. 30, 1993, from 2.50 percent at June 30, 1992, and the allowance as a percentage of non-performing loans increased to 123 percent from 93 percent over the same period.
 The one-time $10.1 million gain came from the sale of a $300 million, prime-rate-based residential loan portfolio originated and held for investment by the corporation's mortgage banking subsidiary. The portfolio was sold principally to prevent possible future economic loss associated with the prepayment risk inherent in the portfolio.
 The corporation's mortgage banking subsidiary continues to experience unprecedented mortgage refinancing activity resulting in accelerated prepayments in its mortgage servicing portfolio. The prepayment runoff rates in the purchased servicing portfolio and in the excess service fee receivables for the first nine months of 1993 were slightly higher than 40 percent. Since the third quarter 1992, the corporation has aggressively addressed the effect of these prepayment trends through accelerated amortization of its purchased mortgage servicing rights (PMSR) and excess service fee receivables (ESF). This accelerated amortization has resulted in dramatic declines in the PMSR and ESF asset balances. Therefore, although the amortization rate for these assets remained high in the third quarter 1993, actual amortization expense of $14.4 million was $11.5 million lower than in the second quarter 1993.
 The total PMSR and ESF asset balance declined 67 percent to $65 million at Sept. 30, 1993, from $198 million at Sept. 30, 1992.
 Robert J. Mylod, chairman and chief executive officer, said, "We are pleased with the earnings progress made in the third quarter and expect continued improvements in asset quality, lower amortization of servicing assets and a more streamlined cost structure to benefit future earnings."
 Recent tax law changes resulted in an increase in the value of the corporation's Sept. 30, 1993, deferred tax assets creating an income tax benefit in the third quarter of 1993.
 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.)
 MICHIGAN NATIONAL CORPORATION AND SUBSIDIARIES
 CONSOLIDATED FINANCIAL HIGHLIGHTS
 (UNAUDITED)
 THREE MONTHS ENDED
 9/30/93 6/30/93 9/30/92
 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 63,899 62,919 52,859
 Non-interest expense 131,652 138,187 122,651
 --------------------------------------------------------------------
 Income (loss) before income tax expense 27,654 16,147 12,631
 Income tax provision (benefit) (1,506) 0 1,078
 --------------------------------------------------------------------
 Income (loss) before cumulative effect
 of a change in accounting principle 29,160 16,147 11,553
 Cumulative effect of a change
 in accounting principle
 --------------------------------------------------------------------
 Net income (loss) $29,160 $16,147 $11,553
 --------------------------------------------------------------------
 PER COMMON SHARE
 Income (loss) before cumulative effect
 of a change in accounting principle $1.86 $1.00 $0.76
 Cumulative effect of a change
 in accounting principle
 Net income (loss) $1.86 $1.00 $0.76
 Cash dividends declared $0.50 $0.50 $0.50
 Book value end-of-period $52.28 $50.67 $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 $10,397 $10,518 $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 791 766 798
 --------------------------------------------------------------------
 SELECTED AVERAGE BALANCES (IN MILLIONS)
 Total assets $10,391 $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 777 766 801
 --------------------------------------------------------------------
 SELECTED FINANCIAL RATIOS (PCT)
 Return on average shareholders' equity 15.01 8.44 5.77
 Return on average total assets 1.12 0.62 0.44
 Average equity to average total assets 7.48 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) 7.61 7.28 7.45
 Leverage ratio 7.21 6.96 7.27
 Tier 1 risk based capital ratio 9.24 8.88 9.54
 Total risk based capital ratio 11.40 11.08 11.76
 Dividend payout ratio 26.88 50.00 65.79
 --------------------------------------------------------------------
 Certain prior period amounts have been restated to conform to current period presentation.
 N/M -- Not meaningful
 ------------------------------------------------------------
 MICHIGAN NATIONAL CORPORATION AND SUBSIDIARIES
 CONSOLIDATED FINANCIAL HIGHLIGHTS
 (UNAUDITED)
 NINE MONTHS ENDED
 9/30/93 9/30/92
 OPERATING RESULTS (IN THOUSANDS)
 Interest income $524,788 $591,886
 Interest expense 225,007 293,688
 ------------------------------------------------------------
 Net interest income 299,781 298,198
 Provision for possible credit losses 33,000 55,353
 Non-interest income 178,245 157,967
 Non-interest expense 446,023 347,566
 ------------------------------------------------------------
 Income (loss) before income tax expense (997) 53,246
 Income tax provision (benefit) (1,506) 5,330
 ------------------------------------------------------------
 Income (loss) before cumulative effect
 of a change in accounting principle 509 47,916
 Cumulative effect of a change
 in accounting principle 6,265
 ------------------------------------------------------------
 Net income (loss) $509 $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 $52.28 $53.51
 Market value end-of-period $58.88 $44.00
 Closing market value: high $64.25 $52.00
 Closing market value: low $50.00 $40.25
 ------------------------------------------------------------
 SELECTED PERIOD-END BALANCES (IN MILLIONS)
 Total assets $10,397 $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 791 798
 ------------------------------------------------------------
 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 784 786
 ------------------------------------------------------------
 SELECTED FINANCIAL RATIOS (PCT)
 Return on average shareholders' equity 0.09 9.19
 Return on average total assets 0.01 0.68
 Average equity to average total assets 7.61 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) 7.61 7.45
 Leverage ratio 7.21 7.27
 Tier 1 risk based capital ratio 9.24 9.54
 Total risk based capital ratio 11.40 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- 10/20/93
 /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

KE-SB -- DE031 -- 4772 10/20/93 16:38 EDT
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Date:Oct 20, 1993
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