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NORWEST CORPORATION REPORTS RECORD QUARTERLY AND NINE MONTH EARNINGS

QUARTERLY HIGHLIGHTS:

Record quarterly earnings, up 26.0 percent from prior year Record quarterly earnings per share, up 26.1 percent from prior year Record return on common equity of 21.0 percent Return on assets of 1.38 percent Net interest margin of 5.54 percent Total assets exceed $50 billion for the first time
 (in millions, except
 per share amounts) Third Quarter Nine Months
 1992 Percent 1992 Percent
 1993 Change 1993 Change (a)
 Net Income $167.3 26.0 $478.6 27.8
 Net Income Per
 Common Share .55 26.1 1.56 28.3
 Return on Common
 Equity (pct.) 21.0 15.2 20.7 17.0
 Return on Assets (pct.) 1.38 9.5 1.38 16.8
 Net Interest Margin (pct.) 5.54 (1.2) 5.64 4.8
 Non-Performing Assets $298.2 (18.3) $298.2 (18.3)
 (a) Comparisons are before the reduction of net income for the cumulative effect of a 1992 change in accounting for postretirement medical benefits.
 MINNEAPOLIS, Oct. 14 /PRNewswire/ -- Norwest Corporation today reported record net income of $167.3 million for the quarter ended September 30, 1993, a 26.0 percent increase over the $132.7 million earned in the third quarter of 1992. Net income per common share was a record 55 cents, compared with 43 cents in the third quarter of 1992, an increase of 26.1 percent. Return on common equity was a record 21.0 percent and return on assets was 1.38 percent for the third quarter of 1993, compared with 18.2 percent and 1.26 percent, respectively, in the third quarter of 1992.
 For the first nine months of 1993, net income was a record $478.6 million, or $1.56 per common share, an increase of 27.8 percent and 28.3 percent, respectively, over the $374.5 million or $1.22 per common share earned in the first nine months of 1992. Return on common equity was 20.7 percent and return on assets was 1.38 percent for the first nine months of 1993, compared with 17.7 percent and 1.18 percent, respectively, for the same period a year ago.
 The 1992 third quarter and nine months' results have been restated for the 2 for 1 stock split (effected in the form of a 100 percent stock dividend distributed on June 28, 1993) and include Lincoln Financial Corporation, acquired on February 9, 1993, in a pooling of interests transaction. The 1992 nine months' results, for comparative purposes, do not include a one-time special charge of $76.0 million, or 26 cents per common share, related to Norwest's early adoption of Statement of Financial Accounting Standards No. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions (FAS-106).
 "We are very pleased with the performance of all business units and our continued growth in earnings and earnings per share", said Richard M. Kovacevich, Norwest's president and chief executive officer. "Norwest Financial continued its strong earnings growth with an 34.8 percent increase over the third quarter of last year. Banking Group earnings increased 34.7 percent over the third quarter of 1992 with Illinois, Iowa, Montana/Wyoming, Nebraska and Wisconsin achieving returns on assets in excess of 1.30 percent. Mortgage banking earnings declined $5.3 million from the third quarter of 1992 due to the retention of all servicing in the quarter. In the third quarter of 1992, $2.6 billion of servicing was sold at gains of $16.2 million.
 "These strong results include increased expenses in the quarter and year to date resulting from the changes made in pension and postretirement benefits actuarial assumptions, the shortening of depreciable lives on mainframe computers, capping the amortizable life of goodwill at 15 years, increased and accelerated amortizations on other intangibles, writedowns of excess facilities and other assets and acquisition related charges all totalling $38.7 million in the quarter and $147.8 million for the first nine months. The change in federal income tax rates increased tax expense by $0.3 million in the current quarter and nine months.
 "We have seen loan growth in most of our regions, primarily in consumer related products. Excluding the acquisitions of Citibank Arizona and Columbia Savings during the quarter, loans and leases, student loans and mortgages held for sale increased 7.6 percent since year-end and 3.0 percent in the current quarter. Non-performing assets were essentially flat during the quarter at $298.2 million or 1.13 percent of loans, leases and other real estate owned. Excluding the non-performing assets acquired in the Citibank Arizona transaction, non- performing assets declined $11.5 million from the end of the second quarter. Our allowance for credit losses was $759.9 million at September 30, 1993 and represents 331.7 percent of non-performing loans and leases."
 Norwest's net interest margin was 5.54 percent for the third quarter of 1993, compared with 5.61 percent in the third quarter of 1992 and 5.65 percent in the second quarter of 1993. The decrease in net interest margin from the third quarter of 1992 was primarily due to a 67 basis point decrease in yields on earning assets, partially offset by lower funding costs. The decline in net interest margin of 11 basis points from the second quarter of 1993 was due to lower yields on earning assets and growth in mortgages held for sale as a percent of total earning assets, partially offset by lower funding costs. Average loans, leases, student and mortgage loans held for sale increased 24.7 percent over the third quarter of 1992 and 5.8 percent over the second quarter of 1993.
 Consolidated tax-equivalent net interest income in the third quarter of 1993 was $602.7 million, compared with $530.4 million in the third quarter of 1992, an increase of 13.6 percent, and 2.0 percent above the $591.0 million earned in the second quarter of 1993. The increase from the third quarter of 1992 is due to a 13.9 percent increase in average earning assets partially offset by a 7 basis point decrease in net interest margin.
 Norwest provided $23.0 million for credit losses in the third quarter of 1993, or 0.36 percent of average loans and leases. This compares with $43.3 million, or 0.80 percent, in the same period a year ago and $39.4 million, or 0.65 percent, in the second quarter of 1993. Net credit losses totaled $30.6 million, compared with $54.5 million in the third quarter of 1992 and $43.7 million in the second quarter of 1993. As a percent of average loans and leases, net credit losses were 0.48 percent in the third quarter of 1993, compared with 1.01 percent in the same period a year ago and 0.72 percent in the second quarter of 1993. For the first nine months of 1993, Norwest's provision for credit losses amounted to $99.6 million, compared with net charge-offs of $111.7 million.
 Non-interest income increased 4.8 percent over the third quarter of 1992 and declined 10.8 percent from the second quarter of 1993. For the first nine months of 1993, non-interest income was up $192.7 million, an increase of 20.9 percent over 1992. These increases are primarily due to increased mortgage banking revenues, insurance fees, net venture capital gains and trading account gains. Excluding venture capital gains, gains on sales of investment securities available for sale and investment securities, non-interest income increased 23.3 percent for the nine months ended September 30, 1993. Non-interest expenses increased 11.8 percent over the third quarter of 1992 and declined 1.9 percent from the second quarter of 1993. For the first nine months of 1993, non-interest expenses were up $314.6 million, an increase of 17.7 percent over 1992. The increase from the third quarter of 1992 is primarily due to increased salaries and benefits, at both Norwest Mortgage to support the large origination and servicing increases in that business, and at Norwest Financial due to its fourth quarter 1992 acquisition of Trans-Canada Credit Corporation, LTD (Trans-Canada).
 The Banking Group reported earnings of $101.4 million in the third quarter of 1993, 34.7 percent above the third quarter 1992 earnings of $75.3 million and 11.5 percent above the second quarter 1993 earnings of $90.9 million. For the first nine months of 1993, the Banking Group had record net income of $288.6 million, a 31.4 percent increase from the $219.7 million earned in the same period a year ago. The increase in Banking Group earnings over the first nine months of 1992 reflect an 8.3 percent growth in net interest income and a 76.3 percent decrease in the provision for credit losses, partially offset by a 7.8 percent increase in non-interest expenses. Norwest Venture Capital had net unrealized appreciation in its investment portfolio of $132.1 million at Sept. 30, 1993.
 Mortgage banking operations earned $12.6 million in the quarter, compared with $17.9 million in the third quarter of 1992 and $23.0 million in the second quarter of 1993. For the first nine months of 1993, mortgage banking operations had net income of $46.1 million, an increase of 4.9 percent over the first nine months of 1992. Servicing increased $7.8 billion in the quarter to $38.0 billion at September 30, 1993 and increased $22.8 billion from last year. Originations amounted to approximately $9.5 billion during the quarter and $23.2 billion in the first nine months, increases of 65.9 percent and 59.7 percent, respectively, over the same periods last year.
 Norwest Financial reported record earnings of $53.3 million in the third quarter of 1993, compared with $39.5 million in the same period a year ago and $47.2 million in the second quarter of 1993. Norwest Financial's net income of $143.9 million for the first nine months of 1993 was up 29.9 percent from the first nine months of 1992. Norwest Financial's net interest income increased 29.2 percent in the nine month period and average finance receivables grew 19.2 percent while net interest margin widened 113 basis points, reflecting lower short-term rates and the benefits from refinancing long-term debt at lower interest rates.
 Norwest Corporation is a $50.4 billion company providing banking, insurance, investments and other financial services through 2,279 offices in all 50 states, all 10 Canadian provinces and internationally.
 -0- 10/14/93
 /CONTACT: News Media: Larry Haeg, 612-667-7043 or, Investor: Robert S. Strickland, 612-667-7919, both of Norwest/
 /FIRST ADD -- NORWEST CORPORATION TABULAR MATERIAL -- TO FOLLOW/
 (NOB)


CO: Norwest Corporation ST: Minnesota IN: FIN SU: ERN

AL -- MN005 -- 2025 10/14/93 08:39 EDT
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Publication:PR Newswire
Date:Oct 14, 1993
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