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NATWEST BANCORP REPORTS RECORD PROFITS, FIFTH QUARTER OF INCREASED EARNINGS

 JERSEY CITY, N.J., April 20 /PRNewswire/ -- National Westminster Bancorp (NatWest Bancorp) (NYSE: NW) today reported record net income of $60.7 million for the first quarter of 1993, compared with $30.1 million in the first quarter of 1992. The results, which include the recognition of $9.5 million in Federal tax benefits previously unrecorded, reflect five quarters of steadily improving profitability.
 "We are delighted with the pace of our improvement," said John Tugwell, chairman and chief executive. "We have put a difficult period behind us and are now building on a very strong recovery."
 Return on average equity for the first quarter was 13.03 percent, compared with 7.03 percent in the 1992 period, due in part to the low effective tax rate in each period. Earnings before goodwill amortization totaled $69.9 million versus $39.4 million for the quarter ended March 31, 1992, which equates to a return on average tangible equity of 21.73 percent and 14.36 percent, respectively.
 Performance benefited from growth in net interest and non-interest income, and from improving asset quality. Mr. Tugwell further commented, "We have seen significant growth in non-interest income. The development and expansion of a broader product range has begun to yield considerable benefit to our revenue streams. We are also encouraged by the improvements in asset quality. Both non-accrual loans and charge- offs have declined considerably for the 1992 level."
 Provision for loan losses was $33.0 million for the three months ended March 31, 1993, compared with $30.5 million in the 1992 period. Net charge-offs totaled $27.9 million in the first quarter, down from $61.7 million in the comparable 1992 period. NatWest Bancorp's allowance for loan losses was $612.0 million, or 4.42 percent of total loans outstanding at March 31, 1993, compared with $658.3 million, or 4.68 percent at March 31, 1992.
 Non-accrual loans totaled $907.4 million at March 31, 1993, down from $1,143.4 million at March 31, 1992. Non-accrual loans amounted to 6.55 percent of total loans at March 31, 1993 down from 8.12 percent at March 31, 1992. Foreclosed assets (including other real estate owned) amounted to $306.4 million at March 31, 1993, compared with $337.0 million a year ago.
 Net interest income for the first quarter of 1993 was $192.3 million, up from $176.9 million in the first quarter of 1992. Reduced interest lost on non-accrual loans and foreclosed assets (net of interest income recognized) and a substantially higher volume of demand deposits which replaced more costly sources of funds were the major contributors to this increase. As a result of this, net interest income, on a tax- equivalent basis as a percentage of average interest earnings assets (net interest margin), was 3.96 percent in the first quarter of 1993, compared with 3.69 percent in the respective 1992 period.
 Non-interest income totaled $96.5 million for the quarter, an increase of $17.9 million from 1992. The 1993 and 1992 figures included gains of $10.8 million and $9.6 million, respectively, on the sale of securities.
 Excluding securities gains non-interest income increased $16.7 million over the first quarter of 1992. This included a gain of $8.7 million on the sale of stock received in connection with a loan restructuring completed in a prior period. In addition, considerable improvement resulted from growth in deposit and loan-related fees, as well as expanded income from trading and capital market activities.
 Operating expenses were $202.0 million in the first quarter of 1993, compared with $191.5 million in the 1992 period. While this represented an aggregate increased of 5.5 percent, virtually all of the rise was due to the funding of both a more comprehensive incentive compensation program and costs associated with the introduction of new products and the expansion of the consumer banking infrastructure. Partially mitigating these increases were the continuing benefits gained from the consolidation of operations and staff functions, as the size of the workforce declined 3.5 percent from the year ago level. Operating expenses, excluding the impact of the cost of foreclosed assets, were unchanged from the fourth quarter 1992 level.
 This income tax benefit was $4.0 million or the three months ended March 31, 1993, compared with a provision of $3.2 million for the three months ended March 31, 1992. On Jan. 1, 1993, NatWest Bancorp adopted the provision of Statement of Financial Accounting Standards No. 109. "Accounting for Income Taxes" (SFAS 109), retroactive to Jan. 1, 1991. Adoption resulted in a restatement of the 1991 net loss, which increased by $8.0 million due to the recalculation of deferred tax assets using current tax rates. The effect on 1992 was minimal. Furthermore, in connection with the adoption of SFAS 109, NatWest Bancorp reduced the income tax provision by $9.5 million in 1993 by recognizing the future tax benefits associated with net operating loss carryforwards that are likely to be realized in the short-term.
 Equity capital at March 31, 1993, was $1,912.0 million. Risk-based capital ratios were strong, with a Tier 1 ratio of 7.94 percent and a total capital ratio of 12.69 percent.
 NatWest Bancorp, the holding company for New York-based National Westminster Bank USA and New Jersey-based National Westminster Bank NJ, is a wholly owned subsidiary of National Westminster Bank plc, the London-based international banking and financial services organization.
 NATIONAL WESTMINSTER BANCORP INC. AND SUBSIDIARIES
 Financial Highlights
 (Dollar amounts in thousands)
 First quarter 1993 1992
 Net interest income $192,263 $176,867
 Provision for loan losses 30,000 30,500
 Non-interest income 96,491 78,547
 Operating expenses:
 Foreclosed assets 12,744 12,019
 Other 189,281 179,527
 Net income 60,687 30,148
 Net interest margin
 (as a percent) 3.96 3.69
 Return on average equity
 (as a percent) 13.03 7.03
 Return on average tangible equity
 (as a percent) 21.73 14.36
 Return on average assets
 (as a percent) 1.12 .56
 March 31 1993 1992
 Total assets $22,042,830 $22,527,615
 Total loans 13,858,298 14,077,548
 Total core deposits 13,228,660 13,097,450
 Total equity capital 1,911,957 1,726,260
 Allowance for loan losses
 as a percentage of total
 loans 4.42 4.68
 Non-accrual loans as
 a percentage of total loans 6.55 8.12
 Capital ratios (as a percent):
 Risk-based capital ratios:
 Tier 1 7.94 6.47
 Total 12.69 10.97
 Leverage ratio 6.17 5.25
 -0- 4/20/93
 /CONTACT: Chris Cameris, 212-602-2505, or Tim Connolly, 201-547-7533, both of National Westminster Bancorp/
 (NW)


CO: National Westminster Bancorp ST: New Jersey IN: FIN SU: ERN

AH-TS -- NY018 -- 7874 04/20/93 09:43 EDT
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Date:Apr 20, 1993
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