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MNC FINANCIAL, INC. REPORTS DECLINE IN NONPERFORMING ASSETS AND CONTINUED PROFITABILITY

 MNC FINANCIAL, INC. REPORTS DECLINE IN NONPERFORMING ASSETS
 AND CONTINUED PROFITABILITY
 BALTIMORE, July 16 /PRNewswire/ -- MNC Financial, Inc. (NYSE: MNC), parent company of American Security Bank and Maryland National Bank, reported today a decline in nonperforming assets and its second consecutive quarter of profitability with net income of $2.0 million for the quarter ended June 30, 1992.
 This compares with net income of $1.1 million for the first quarter and a net loss of $(82.4) million for the fourth quarter of last year.
 MNC Financial President and Chief Executive Officer Frank P. Bramble said, "Our second quarter performance reflects continuing improvement in asset quality and core earnings power. The economic environment remains very challenging, but we are encouraged by the continuing reduction of our nonperforming assets."
 For the second quarter:
 Core profitability, or pre-tax operating income before credit costs (loan loss provision and OREO expense) and gains/losses on the sales of assets, increased 45 percent to $55 million from $38 million in the previous quarter, and compares with $28 million in the fourth quarter of 1991. The net interest margin, on a non-fully tax equivalent basis, was 3.40 percent compared with 3.13 percent and 2.78 percent in the prior quarter and the second quarter of 1991, respectively. MNC said its core earnings power reflects the inherent strength of its products and services, combined with strong market share and a strong performance once again from the mortgage banking and trust subsidiaries.
 Second quarter gains on investment securities amounted to approximately $36 million, as compared with $35 million of gains realized during the first quarter of 1992. The first quarter also included a $6 million gain on the sale of a portion of MNC's mortgage servicing portfolio. The net unrealized gains on MNC's investment securities portfolio amounted to approximately $120 million at June 30, 1992. "Moving through the third quarter and balance of the year, our objective is to continue improving MNC's profitability through further growth of the core operating earnings stream," said Bramble.
 Nonperforming loans and foreclosed assets were $1.391 billion, a reduction of $227 million, or 14 percent, since the end of the first quarter and a reduction of $472 million, or 25 percent, from the Sept. 30, 1991, quarter-end peak in nonperforming assets. The company noted that despite the addition of some new nonperforming assets, it continued to dispose of problem assets at a rate of about $175 million per quarter through solutions involving sales, recoveries and restructurings.
 Net charge-offs were $98 million, as compared with $100 million in the first quarter, $156 million in the fourth quarter of 1991 and $116 million for the second quarter a year ago. MNC said it is encouraged to see a favorable declining trend in the level of its charge-offs.
 A provision of $42 million was added to reserves for possible credit losses, as compared with the addition of $46 million for the first 1992 quarter, and $115 in the fourth quarter and $73 million in the second quarter of 1991, respectively. Total reserves at quarter-end were reduced to $686 million, while the coverage ratio of total nonperforming loans increased to .83x, up from .77x at 3/31/92.
 Noninterest expenses, excluding OREO costs, were $149 million, compared with $154 million in the first quarter, $165 million in the fourth quarter of 1991 and $190 million for the quarter ended June 30, 1991. As a result of successfully implementing its broad expense reduction program during the latter part of 1991, strict control over costs is continuing to enable significant permanent savings, according to the company.
 Stockholders' equity and loan loss reserves were $1.717 billion, and estimated Tier 1 and total capital ratios at June 30 were 7.85 percent and 11.25 percent, respectively.
 MNC Financial, Inc. is a bank holding company which delivers commercial, consumer, trust and specialty banking products in the Baltimore/Washington marketplace. Principal subsidiaries include Maryland National Bank and Maryland National Mortgage Corp. of Baltimore; American Security Bank and Security Trust Company, N.A. of Washington, D.C.; and Virginia Federal Savings Bank of Richmond.
 MNC FINANCIAL AND SUBSIDIARIES
 FINANCIAL HIGHLIGHTS
 (in thousands except for percentages and per-share data)
 Three Months Ended Percent
 June 30 1992 1991 Change
 Operating Results:
 Net interest income $ 128,244 $ 123,941 3
 Other operating income 110,916 56,778 95
 Other operating expense 194,324 210,633 (8)
 Net income (loss) 1,994 (82,289) ---
 Return on assets (Percent) .05 (1.71) ---
 Return on common equity (Percent) .14 (30.19) ---
 Net interest margin (Percent) 3.40 2.78 ---
 Per Share Data:
 Net income (loss) primary $ 0.00 $ (.96) ---
 Net income (loss) fully diluted 0.00 (.96) ---
 Dividends --- --- ---
 Financial Condition:
 Average balances:
 Investment securities $ 3,937,917 $ 4,162,616 (5)
 Loans, net of unearned income 9,599,461 12,072,611 (20)
 Earning assets 15,182,938 17,883,963 (15)
 Assets 16,724,447 19,337,653 (14)
 Deposits 12,834,616 15,446,807 (17)
 Stockholders' equity 1,036,311 1,221,863 (15)
 Primary shares outstanding 88,988 87,228 2
 Fully diluted shares outstanding 89,000 87,240 2
 At period-end:
 Investment securities $ 4,515,833 $ 4,036,843 12
 Loans, net of unearned income 9,398,621 11,693,364 (20)
 Earning assets 15,025,470 17,321,546 (13)
 Assets 16,597,159 19,118,220 (13)
 Deposits 12,306,329 15,305,032 (20)
 Stockholders' equity 1,030,866 1,162,144 (11)
 Common shares outstanding 89,275 87,323 2
 Reserve for Possible Credit Losses:
 Balance April 1 $ 742,054 $ 875,494 (15)
 Provision charged to expense 41,866 72,947 (43)
 Reserves (disposed) --- (1,439) ---
 Less: Net credit losses 98,314 115,854 (15)
 Balance June 30 $ 685,606 $ 831,148 (18)
 Annualized net credit losses/average
 loans (Percent) 4.12 3.85 ---
 Six Months Ended Percent
 June 30 1992 1991 Change
 Operating Results:
 Net interest income $ 246,947 $ 237,275 4
 Other operating income 225,497 528,170 (57)
 Other operating expense 380,131 438,099 (13)
 Net income 3,087 71,698 (96)
 Return on assets (Percent) .04 .72 ---
 Return on common equity (Percent) (.06) 12.06 ---
 Net interest margin (Percent) 3.26 2.58 ---
 Per Share Data:
 Net income - primary $ 0.00 $ .78 ---
 Net income - fully diluted 0.00 .78 ---
 Dividends --- --- ---
 Book value 10.29 12.16 (15)
 Financial Condition:
 Average balances:
 Investment securities $ 3,850,871 $ 4,214,226 (9)
 Loans, net of unearned income 9,837,207 12,532,189 (22)
 Earning assets 15,215,095 18,577,640 (18)
 Assets 16,793,620 20,043,690 (16)
 Deposits 13,203,191 15,690,243 (16)
 Stockholders' equity 1,031,409 1,244,804 (17)
 Primary shares outstanding 88,562 87,112 2
 Fully diluted shares outstanding 88,574 87,124 2
 Reserve for Possible Credit Losses:
 Balance January 1 $ 795,938 $ 923,860 (14)
 Provision charged to expense 88,287 237,723 (63)
 Reserves (disposed) --- (109,036) ---
 Less: Net credit losses 198,619 221,399 (10)
 Balance June 30 $ 685,606 $ 831,148 (18)
 Annualized net credit losses/average
 loans (Percent) 4.06 3.56 ---
 Reserve/period-end loans (Percent) 7.29 7.11 ---
 Nonperforming Assets:
 Nonaccruing loans $ 798,828 $ 1,258,708 (37)
 Restructured loans 39,114 486 ---
 Assets acquired in foreclosure 561,737 558,831 1
 Nonperforming assets $ 1,390,679 $ 1,818,025 (24)
 Nonperforming assets/period-end
 loans plus foreclosed assets (Percent) 13.96 14.84 ---
 Reserve/nonperforming loans .83x .66x ---
 Accruing loans past due 90 days
 or more $ 90,930 $ 91,210 ---
 -0- 7/16/92
 /CONTACT: Daniel G. Finney, senior vp, corporate communications, 410-547-4038, or Charles L. Davis, vp and director of investor relations, 410-547-4410, both of MNC Financial/
 (MNC) CO; MNC Financial, Inc. ST: Maryland IN: FIN SU: ERN


MK-LJ -- PH008 -- 9931 07/16/92 10:19 EDT
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