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MUTUAL SAVINGS BANK ANNOUNCES FIRST QUARTER EARNINGS

 BAY CITY, Mich., April 14 /PRNewswire/ -- Mutual Savings Bank, f.s.b. (NASDAQ-NMS: MSBK) reported net income for the first quarter ended March 31, 1993 of $2.157 million, or $1.42 per share, compared to $595,175 earned a year earlier. Mutual converted to public ownership July 16, 1992, so there is no comparable per share figure for 1992.
 Included in this income are proceeds of $1.47 million from the sale of Mutual's interest in a financial services company and a one-time benefit related to the adoption of Financial Accounting Standard 109 "Accounting for Income Taxes."
 The Bank's core earnings continue to improve. According to Wendell L. Evans, Jr., chairman, "net interest income rose 94 percent this quarter to $3.015 million, compared to $1.554 million from a year ago. This was due to an increase in earning assets coupled with an improvement in the net interest margin. The margin in the first quarter, after the effect of the Bank's interest hedge expense, equaled 1.58 percent versus 0.92 percent for the first quarter of 1992. Despite an almost 13 percent increase in assets, overhead expenses declined 4.4 percent. These expenses, as a percent of average assets, declined to 2.10 percent in 1993, compared to 2.42 percent in last year's first quarter."
 Commenting on the Bank's growth in the quarter, Mr. Evans said, "mortgage originations in the first quarter equaled $61.4 million, a 14 percent increase over last year's figure. Our first quarter is traditionally our slowest period for mortgage origination. However, at the end of March, we had a record $132 million of mortgage applications that were not yet closed. This is a good indication of the strong loan demand we are experiencing. In addition, we opened a Houston loan origination office in March, too late to have any effect on first quarter figures, but in line with our strategy to increase our mortgage generating capacity."
 "Our rapid growth has not come at the expense of asset quality. As of March 31, 1993, real estate owned, that is property taken back at foreclosure, equaled 0.06 percent of assets. This is a fraction of the industry's average ratio of 1.29 percent. Total non-performing assets were equal to 0.51 percent of assets, well below the industry average of 3.11 percent, and below our figure at year end."
 "Stockholders' equity equaled $40.64 million at the end of the quarter, a 56 percent increase over a year ago. This increase reflects the Bank's initial sale of common stock last July and retained earnings since then. The Bank is in compliance with all requirements, as well as future guidelines as currently prescribed."
 The bank's assets increased to $806.78 million at March 31. At the same date a year ago, the Bank's assets were $715.19 million. Deposits decreased 6 percent from $519.92 million to $488.77 million.
 Mutual Savings Bank serves central and southern Michigan with 25 full-service offices and five Michigan loan production offices. The Bank also has loan production offices in Dallas, Houston, Austin and Texarkana, Texas. Mutual is the sixth largest savings bank headquartered in Michigan.
 MUTUAL SAVINGS BANK, f.s.b. AND SUBSIDIARY
 Consolidated Balance Sheets
 March 31, 1993 Dec. 31, 1992
 (Unaudited)
 Assets
 Cash and cash equivalents 25,852,606 43,276,292
 Investment securities
 (market value of $38,565,467 in
 1993 and $25,889,503 in 1992 38,930,257 26,458,470
 Mortgage-backed securities
 (market value of $469,682,533 in
 1993 and $415,915,063 in 1992) 463,671,821 418,403,835
 Loans held for sale 8,949,725 7,881,429
 Loans, net of allowance for loan
 losses of $2,537,458 in 1993 and
 $2,568,751 in 1992 245,121,271 235,512,526
 Real estate owned, net 493,720 547,494
 Federal Home Loan Bank stock,
 at cost 6,379,600 6,379,600
 Premises and equipment, net 8,301,520 8,251,790
 Accrued interest receivable 4,314,776 3,847,070
 Prepaid expenses and other assets 2,255,724 1,354,011
 Excess of cost over net asset
 acquired 2,514,591 2,715,311
 Total assets 806,785,611 754,627,828
 LIABILITIES & STOCKHOLDERS' EQUITY
 Deposits (net of deferred losses on
 hedge transactions of $4,324,959 in
 1993 and $4,593,951 in 1992) 488,771,482 501,889,458
 Securities sold under agreements
 to repurchase (net of deferred
 losses on hedge transactions of
 $92,867 in 1993 and $62,314 in 1992) 253,694,133 192,183,666
 Other borrowed money 718,750 718,750
 Advance payments by borrowers
 for taxes and insurance 11,847,787 11,707,768
 Accrued interest payable 5,655,857 4,373,052
 Accrued expenses & other liabilities 5,453,387 5,582,665
 Total liabilities 766,141,396 716,455,379
 Commitments and contingencies -- --
 Preferred stock ($.01 par value,
 5,000,000 shares authorized, no
 shares issued and outstanding in
 1993 and 1992 -- --
 Common stock ($.01 par value,
 20,000,000 shares authorized,
 $1,449,951 shares issued & outstanding
 in 1993 and 1,437,500 shares issued &
 outstanding in 1992) 14,500 14,375
 Additional paid-in capital 11,004,491 10,895,669
 Retained earnings - substantially
 restricted 30,490,729 28,333,951
 Unrealized loss on marketable
 equity securities 0 (185,076)
 Employee stock ownership
 plan loan guarantee (718,750) (718,750)
 Unearned compensation -
 restricted stock awards (146,755) (167,720)
 Total stockholders' equity 40,644,215 38,172,449
 Total liabilities and
 stockholders' equity $ 806,785,611 $ 754,627,828
 (Dollars in thousands) As of March 31, 1993
 GAAP/Regulatory Capital: Amount Ratio Required
 Tangible Capital 38,130 4.74 pct 1.50 pct
 Core Capital 40,644 5.05 pct 3.00 pct
 Risk-based capital 42,731 14.00 pct 8.00 pct
 MUTUAL SAVINGS BANK, f.s.b. AND SUBSIDIARY
 Consolidated Statements Of Income
 (Unaudited)
 Three months ended March 31 1993 1992
 Interest Income:
 Interest and fees on loans 5,062,913 6,239,162
 Interest on mortgage-backed
 securities 6,691,938 4,791,142
 Interest on investment securities 686,417 2,576,457
 Other interest income 552,869 368,342
 Total interest income 12,994,137 13,975,103
 Interest expense:
 Interest on deposits 8,143,915 9,259,923
 Interest on short-term
 borrowings 1,835,420 3,160,762
 Total interest expense 9,979,335 12,420,685
 Net interest income 3,014,802 1,554,418
 Provision for loan losses: 0 0
 Net interest income after
 provision for loan losses 3,014,802 1,554,418
 Other income (loss):
 Servicing income & other fees 1,241,821 1,370,141
 Net loss on sale of premises
 & equipment & real estate owned (13,367) (8,774)
 Net gain on sale of investment
 securities 1,758,441 468,897
 Net gain on sale of mortgage-
 backed securities and portfolio
 mortgage loans 0 2,573,562
 Other, net 157,631 53,627
 Total other income 3,144,526 4,457,453
 Other expenses:
 Salaries and employee benefits 1,644,292 1,555,311
 Occupancy, equip & supplies 786,735 787,901
 Federal insurance premiums 335,883 293,966
 Amortization of excess of cost
 over net assets acquired 200,720 205,752
 Non-recurring charges 0 918,471
 Other 1,333,270 1,655,295
 Total other expense 4,300,900 5,416,696
 Income before income tax
 expense, extraord. item and
 cumulative effect of change
 in accounting principle 1,858,428 595,175
 Income tax expense 538,050 478,000
 Income before extraord. item
 and cumulative effect of change
 in accounting principle 1,320,378 117,175
 Extraordinary item - utilization
 of net operating loss carryforwards 0 478,000
 Cumulative effect of change in
 accounting principle -
 income taxes 836,400 --
 Net income 2,156,778 595,175
 Earnings per share:(A)
 Primary earnings per share:
 Income before extraordinary item
 and cumulative effect of change
 in accounting principle 0.88 --
 Cumulative effect of change in
 accounting principle-income taxes 0.55 --
 Primary earnings per share 1.43 --
 Fully diluted earnings per share:
 Income before extraordinary item and
 cumulative effect of change in
 accounting principle 0.87 --
 Cumulative effect of change in
 accounting principle-income taxes 0.55 --
 Fully diluted earnings per share 1.42 --
 (A) Conversion to stock form of ownership, July 16, 1992.
 MUTUAL SAVINGS BANK, f.s.b. AND SUBSIDIARY
 Financial Highlights
 (Dollars in thousands, except per share data)
 Pct. Year Ended
 1993 1992 Change 12/31/92
 Three months ended March 31: (Unaudited)
 Net interest income $ 3,015 $ 1,554 94.0 $ 8,117
 Net income 2,157 595 262.5 2,896
 Loans originated:
 Residential real estate $61,362 $53,874 13.9 $354,222
 Return on aver. assets (pct) 1.11 0.34 0.40
 Return on aver. equity (pct) 22.07 9.20 9.23
 Per common share:
 Primary earnings (A) $1.43 -- $1.11
 Fully diluted earnings (B) $1.42 -- $1.10
 General and admin. expenses
 to average assets (pct) 2.10 2.42 2.16
 Net interest margin before
 hedge (pct) 3.04 2.86 2.99
 Net interest margin after
 hedge (pct) 1.58 0.92 1.17
 Loan loss reserves to non-
 performing assets (pct) 61.83 59.13 63.88
 Non-performing assets to
 total assets (pct) 0.51 0.68 0.53
 At March 31 (Unaudited)
 Total assets $808,786 $715,192 12.8 $754,628
 Loans receivable 245,121 245,750 (0.3) 235,513
 Deposits, net of deferred
 loss on hedge transactions 488,771 519,922 (6.0) 501,889
 Borrowings 253,694 157,303 61.3 192,184
 Stockholders' equity (C) 40,644 26,033 56.1 38,172
 Tangible equity 38,130 22,700 68.0 35,457
 Loans serviced for others $444,221 $324,400 36.9 $434,419
 No. of com. shares outstg. 1,449,951 -- 1,437,500
 Book value at period end $28.03 -- $26.55
 Tangible book value at
 period end $26.30 -- $24.67
 Tangible capital to tangible
 assets (required 1.50 pct) 4.74 3.11 4.72
 Core capital to core assets
 (required 3.00 pct) 5.05 3.58 5.08
 Risk-based capital to risk-based
 assets (required 8.00 pct) 14.00 8.95 13.77
 (A) -- Conversion to stock form of ownership, July 16, 1992.
 (B) -- Earnings per share, assuming full dilution from exercise of stock options.
 (C) -- March 1992 amount represents retained earnings only.
 -0- 4/14/93
 /CONTACT: Wendell L. Evans, Jr., chairman of the board and chief executive officer, or Bernard D. Williams, senior vice president and chief financial officer and treasurer, 517-892-3511, both of Mutual Savings Bank, f.s.b./
 (MSBK)


CO: Mutual Savings Bank, f.s.b. ST: Michigan IN: FIN SU: ERN

TM-KW -- NY086 -- 0776 04/14/93 17:16 EDT
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