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NATWEST BANCORP REPORTS RECORD PROFITS, UP 92 PERCENT; EIGHTH CONSECUTIVE QUARTER OF INCREASED EARNINGS

 JERSEY CITY, N.J., Jan. 13 /PRNewswire/ -- National Westminster Bancorp (NatWest Bancorp) (NYSE: NW) reported record net income of $96.1 million for the fourth quarter of 1993, compared with $50.0 million in the fourth quarter of 1992, up 92 percent. For the year ended Dec. 31, 1993, net income was $298.1 million compared with net income of $155.2 million for the corresponding 1992 period, also an increase of 92 percent. The 1993 results included the recognition of previously unrecorded Federal tax benefits, to be utilized by future earnings, of $29 million and $70 million in the quarter and full year, respectively. The performance benefited from a considerable improvement in asset quality and the continued growth and diversification of core products.
 "We are justifiably proud of the accomplishments of the past year", said NatWest Bancorp Chairman and Chief Executive John Tugwell. "While considerable investment was necessary to strengthen our business, we were able to control the growth in operating expenses and to improve productivity, leading to substantial growth in income. The improvements in asset quality have considerably lessened loan portfolio risk and the cost of managing problem credits, while the broadening of our product base has added stability to our income stream."
 The reductions during the year of $557.6 million in non-accrual loans to $451.3 million at Dec. 31, 1993 and $181.7 million in foreclosed assets to $98.2 million at Dec. 31, 1993 (a combined improvement of 57 percent) were due mainly to successful recovery work in returning loans to accrual status and to the sale of problem assets at economically beneficial prices. Non-accrual loans fell from 7.14 percent at Dec. 31, 1992 to 3.24 percent of total loans at Dec. 31, 1993.
 A consequence of the asset sales was an increase in net charge-offs to $139.9 million in the fourth quarter and $341.2 million for the year ended Dec. 31, 1993, up from $60.2 million and $201.6 million, respectively, in the corresponding 1992 periods. Reserves had been established in earlier periods in anticipation of these charge-offs.
 NatWest Bancorp's allowance for loan losses was $361.7 million, or 2.60 percent of total loans outstanding at Dec. 31, 1993, compared with $609.9 million, or 4.31 percent at Dec. 31, 1992. The allowance amounted to 80 percent of non-accrual loans at Dec. 31, 1993, up from 60 percent at Dec. 31, 1992. Provisions for loan losses were $19.0 million and $93.0 million for the fourth quarter and year ended Dec. 31, 1993, respectively, down from $30.5 million and $122.0 million in the comparable 1992 periods. The improved risk profile of the loan portfolio made this reduction possible.
 Return on average equity for the quarter and year ended Dec. 31, 1993 was 18.23 percent and 15.01 percent, respectively, compared with 10.85 percent and 8.73 percent in the corresponding 1992 periods. Before goodwill amortization, return on average tangible equity was 27.21 percent for the quarter and 23.66 percent for the year ended Dec. 31, 1993, compared with 18.99 percent and 16.41 percent in the corresponding 1992 periods.
 Net interest income for the fourth quarter of 1993 was $207.5 million, compared with $197.2 million in the fourth quarter of 1992. For the year ended Dec. 31, 1993, net interest income was $798.2 million, compared with $744.2 million in 1992. A reduction in the amount of interest lost on non-accrual loans and foreclosed assets (net of interest income recognized) and a substantially higher volume of average demand deposits, which replaced more costly sources of funds, were the major contributors to these increases. In addition, although commercial loan demand has evidenced limited growth, there has been a marked increase in consumer loan demand which has further enhanced net interest income.
 Net interest income on a tax-equivalent basis expressed as a percentage of average interest earning assets (net interest margin) was 3.78 percent in the fourth quarter and 3.86 percent for the year ended Dec. 31, 1993 compared with 3.79 percent and 3.76 percent in the corresponding 1992 periods.
 Non-interest income totaled $101.5 million in the fourth quarter of 1993, an increase of $13.4 million from the 1992 period. For the full year, non-interest income was $404.1 million, up from $330.2 million in 1992. Growth in non-interest income has been successfully achieved through the development and diversification of revenue streams across various business lines. Market conditions allowed further gains to be taken in the securities portfolio amounting to $13.7 million, and $63.5 million, respectively, in the fourth quarter and year ended Dec. 31, 1993, compared with $10.1 million, and $42.1 million in the respective 1992 periods. Excluding the impact of securities gains, non- interest income rose $9.8 million, and $52.4 million in the quarter and full year, respectively.
 Bancorp continued to make investments that enhanced the marketability of existing products, developed new products and enabled the acquisition of or entry into new businesses. These included the acquisition and opening of several branches in high-traffic areas, the purchase of mortgage servicing and credit card portfolios and the development and marketing of consumer products. These expenditures have already led to increased income from a higher level of demand deposit balances together with improved transaction-based service charges on deposits, loan-related fees, and commissions from investment and capital market product sales.
 The expenditures necessary to develop these businesses resulted in an increase in operating expenses to $216.7 million in the fourth quarter and $856.7 million in the year ended Dec. 31, 1993, compared with $197.3 million and $782.3 million in the respective 1992 periods. Foreclosed assets costs were $23.2 million and $78.7 million for the quarter and full year, respectively. The increases of $15.2 million and $32.5 million over the corresponding 1992 periods were due to the asset sales discussed earlier.
 Excluding these costs, operating expenses were up 2 percent in the quarter and 6 percent for the year. The increase included the funding of a more comprehensive performance-based compensation program, costs associated with the development and introduction of new products and the expansion of the consumer banking infrastructure. Also contributing to the increase in operating expenses were higher FDIC insurance costs due to higher premium rates charged, and higher health insurance costs associated with the adoption of a new accounting standard requiring the accelerated recognition of post-retirement benefits. Partially mitigating these increases were the continuing benefits gained from the consolidation of operations and staff functions.
 The utilization of prior period tax loss carryforwards resulted in no Federal income tax provision for the years ended Dec. 31, 1993 and 1992. The combined federal and state income tax benefit was $22.9 million in the fourth quarter of 1993, compared with a provision of $7.4 million in the fourth quarter of 1992. For the year ended Dec. 31, 1993, the benefit was $45.6 million, compared with a provision of $14.9 million in the comparable 1992 period.
 On Jan. 1, 1993, NatWest Bancorp adopted the provisions 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 lower 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 $29 million in the fourth quarter and $70 million in the year ended Dec. 31, 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 Dec. 31, 1993 was $2,149.4 million. Risk-based capital ratios were strong, with a Tier 1 ratio of 9.33 percent and a total capital ratio of 13.88 percent.
 NatWest Bancorp, the $24 billion 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)
 For the quarter Ended Dec. 31 1993 1992
 Net interest income $207,475 $197,235
 Provision for loan losses 19,000 30,500
 Non-interest income 101,500 88,053
 Operating expenses 216,747 197,304
 Net income 96,085 50,036
 Net interest margin 3.78% 3.79%
 Return on average equity 18.23% 10.85%
 Return on average tangible equity 27.21% 18.99%
 Return on average assets 1.57% .86%
 For the Year Ended Dec. 31 1993 1992
 Net interest income $798,157 $744,183
 Provision for loan losses 93,000 122,000
 Non-interest income 404,050 330,173
 Operating expenses 856,681 782,302
 Net income 298,092 155,157
 Net interest margin 3.86% 3.76%
 Return on average equity 15.01% 8.73%
 Return on average tangible equity 23.66% 16.41%
 Return on average assets 1.29% .70%
 At Dec. 31, 1993 1992
 Total Assets $23,661,137 $22,735,126
 Total loans 13,936,316 14,139,321
 Total core deposits 13,944,837 13,841,113
 Total equity capital 2,149,362 1,851,270
 Allowance for loan losses as
 a percentage of total loans 2.60% 4.31%
 Non-accrual loans as a percentage
 of total loans 3.24% 7.14%
 Capital Ratios:
 Risk-Based Capital Ratios:
 Tier 1 9.33% 7.26%
 Total 13.88% 11.94%
 Leverage Ratio 6.66% 5.47%
 -0- 1/13/94
 /CONTACT: Chris Cameris, 212-602-2505, or Tim Connolly, 201-547-7533, both of National Westminster Bancorp Inc./
 (NW) CO: National Westminster Bancorp Inc. ST: New Jersey IN: FIN SU: ERN


GK -- NY002 -- 1715 01/13/94 09:32 EST
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Date:Jan 13, 1994
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