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PRIME BANCSHARES REPORTS SECOND QUARTER RESULTS

 PRIME BANCSHARES REPORTS SECOND QUARTER RESULTS
 DECATUR, Ga., July 21 /PRNewswire/ -- Prime Bancshares, Inc.


(AMEX: PMB), the holding company for Prime Bank, Federal Savings Bank, today announced the results of operations for the second quarter and six months ended June 30.
 Both second quarter and six months results were impacted by non- recurring gains and special charges. Including gains and losses from the sale of securities and special charges, net earnings for the second quarter totaled $1.2 million or $.73 per share, compared to $527,000 or $.33 per share for the same period in 1991. The net loss for the six months amounted to $889,000, or a loss of $.54 per share, compared to net earnings of $1.2 million or $.75 per share in the 1991 period.
 Net operating earnings, which excludes gains and losses on the sale of securities and special charges, amounted to $284,000 for the second quarter of 1992. Net interest income increased by $423,000 to $3.8 million in the second quarter of 1992. Other operating income amounted to $3.0 million reflecting an increase of $1.9 million in the second quarter of 1992, due primarily to a $1.4 million gain on sale of loan servicing rights. Operating expenses, excluding special charges, increased by $1.0 million to $5.1 million in the second quarter of 1992. The increase in expenses included higher salary and benefit costs of $384,000 and increased real estate expense of $233,000 and increased occupancy expense of $175,000. During the second quarter, the provision for loan losses was $1.2 million compared to $356,000 in the 1991 period. Charge-offs for the second quarter of 1992 totaled $1.2 million, which included $899,000 in commercial real estate loan losses.
 Net operating earnings amounted to $648,000 for the six months ended June 30. Because loan charge-offs increased to $1.7 million during the first six months of 1992, the company increased its provision for loan losses to $1.8 million, compared to $577,000 for the same period in 1991.
 During May 1992 the Office of Thrift Supervision ("OTS") required Prime Bank to redesignate its securities portfolio as securities held for sale, to be reflected at the lower of cost or market as of March 31, 1992. As a result of the OTS directive, the company restated its first quarter results to reflect a provision for unrealized losses on securities of $4.5 million. Prime Bank redesignated most of its securities portfolio as held for investment on May 20, 1992. The value of the securities portfolio had increased by $2.9 million from March 31, 1992, which increase is reflected as a reduction of valuation allowance expense in the second quarter of 1992. The effect of this recovery reduced the loss provision charge to $1.6 million, which is included in expense for the first six months of 1992.
 One-time expenses of $1.6 million reduced pre-tax earnings in the second quarter of 1992. These expenses included $939,000 in costs related to the development of the company's headquarters facility in Decatur. Expenses also increased by $179,000 in severance pay and outplacement costs associated with the expense reduction announced by the company on June 15 as a part of its corporate restructuring plan.
 At June 30, Prime Bancshares had consolidated total assets of $686 million, compared with $665 million on Dec. 31, 1991. Deposits were $522 million compared to $512 million at the end of 1991. Stockholders' equity was $37 million or 5.4 percent of total assets on June 30. Prime Bancshares' book value per share was $22.61 as of June 30.
 Prime Bancshares' common stock is listed on the American Stock Exchange under the symbol "PMB." Its subsidiary, Prime Bank, Federal Savings Bank, operates 14 full-service banking offices and 11 loan origination offices in the metropolitan Atlanta area.
 PRIME BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF EARNINGS
 ($ in thousands, except per share data)
 (unaudited)
 3 mos. ended June 30 1992 1991
 Interest income:
 Interest on loans $ 8,318 $ 8,180
 Interest on mortgage-backed securities 4,484 4,879
 Interest and dividends on investments 412 888
 Total interest income 13,214 13,947
 Interest expense
 Interest on deposits 7,582 8,256
 Interest on Federal Home Loan Bank
 advances 999 1,075
 Interest on bonds payable 565 599
 Interest on other borrowed money 348 682
 Total 9,494 10,612
 Less capitalized interest (38) ---
 Total interest expense 9,456 10,612
 Net interest income 3,758 3,335
 Provision for losses on loans 1,228 356
 Net interest income after provision
 for losses on loans 2,530 2,979
 Other income
 Loan fees and service charges 266 287
 Loan servicing fees 432 282
 Gain on sales of loans 663 146
 Gain on sales of mortgage-backed
 securities 276 71
 Gain (loss) on sales of investment
 securities (147) 684
 Gain on sales of loan servicing rights 1,364 ---
 Dividends on FHLB stock 52 77
 Deposit service charges 161 175
 Other income 73 95
 Total other income 3,140 1,817
 Operating expenses
 Salaries and benefits 2,188 1,804
 Net occupancy expense of premises 858 683
 Federal insurance premium 282 232
 Data processing 111 120
 Advertising and promotion 261 210
 Professional and supervisory 202 204
 Net losses related to sales of real estate 45 173
 Expenses related to real estate 1,214 42
 Expenses related to corporate restruct. 179 ---
 Write-off of deferred loan costs 325 ---
 Provision (recovery) for net unrealized
 losses on assets held for sale (2,907) ---
 Write-off of deferred acquisition costs 126 ---
 Other operating expenses 854 583
 Total operating expenses 3,738 4,051
 Earnings (loss) before income taxes 1,932 745
 Income tax expense (benefit) 752 218
 Net earnings (loss) $ 1,180 $ 527
 Earnings (loss) per share $ 0.73 $ 0.33
 6 mos. ended June 30 1992 1991
 Interest income:
 Interest on loans $16,077 $15,600
 Interest on mortgage-backed securities 9,171 9,160
 Interest and dividends on investments 1,006 2,075
 Total interest income 26,254 26,835
 Interest expense
 Interest on deposits 15,635 16,166
 Interest on Federal Home Loan Bank
 advances 2,058 2,009
 Interest on bonds payable 1,145 1,217
 Interest on other borrowed money 733 1,550
 Total 19,571 20,942
 Less capitalized interest (250) ---
 Total interest expense 19,321 20,942
 Net interest income 6,933 5,893
 Provision for losses on loans 1,821 577
 Net interest income after provision
 for losses on loans 5,112 5,316
 Other income
 Loan fees and service charges 503 735
 Loan servicing fees 613 552
 Gain on sales of loans 1,654 595
 Gain on sales of mortgage-backed
 securities 1,015 488
 Gain (loss) on sales of investment
 securities 62 722
 Gain on sales of loan servicing rights 2,044 ---
 Dividends on FHLB stock 108 151
 Deposit service charges 318 342
 Other income 129 173
 Total other income 6,446 3,758
 Operating expense
 Salaries and benefits 4,248 3,317
 Net occupancy expense of premises 1,650 1,327
 Federal insurance premium 564 465
 Data processing 211 237
 Advertising and promotion 401 354
 Professional and supervisory 355 353
 Net losses related to sales of real estate 128 140
 Expenses related to real estate 1,350 132
 Expenses related to corporate restruct. 179 ---
 Write-off of deferred loan costs 325 ---
 Provision (recovery) for net unrealized
 losses on assets held for sale 1,626 ---
 Write-off of deferred acquisition costs 367 ---
 Other operating expenses 1,516 1,088
 Total operating expenses 12,920 7,413
 Earnings (loss) before income taxes (1,362) 1,661
 Income tax expense (benefit) (473) 443
 Net earnings (loss) $ (889) $ 1,218
 Earnings (loss) per share $ (0.54) $ 0.75
 PRIME BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED BALANCE SHEETS
 (dollars in thousands)
 (unaudited)
 6/30/92 12/31/91
 Assets
 Cash $ 12,115 $ 11,434
 Interest-earning deposits 4,372 105
 Federal funds sold 6,350 17,225
 Total cash and cash equivalents 22,837 28,764
 Investment securities 18,281 17,120
 Loans, net 317,247 274,066
 Mortgage-backed securities 222,135 188,203
 Assets held for sale 54,782 78,712
 Receivables for mortgage-backed
 securities sold --- 27,896
 Real estate 9,948 13,254
 Office properties and equip., net 27,743 22,532
 Federal Home Loan Bank stock 3,306 4,233
 Accrued interest receivable 4,563 5,525
 Other assets 5,402 4,990
 Total $686,244 $665,295
 Liabilities and stockholders' equity
 Liabilities
 Deposits $522,243 $512,478
 Fwnership Plan 1,200 1,275
 Advance payments by borrowers for
 taxes and insurance 4,025 2,526
 Deferred income taxes 3,045 3,452
 Accrued expenses and other
 liabilities 5,265 7,363
 Total liabilities 649,272 627,346
 Stockholders' equity
 Common stock 16 16
 Additional paid-in capital 15,204 15,204
 Retained earnings 22,952 24,004
 Guarantee of indebtedness of
 Employee Stock Ownership Plan (1,200) (1,275)
 Total stockholders' equity 36,972 37,949
 Total $686,244 $665,295
 PRIME BANCSHARES, INC. AND SUBSIDIARY
 FINANCIAL HIGHLIGHTS
 (Dollars in thousands, except per share)
 (Unaudited)
 3 mos. ended June 30 1992 1991
 Net earnings (loss) $1,180 $ 527
 Net earnings (loss) per share 0.73 0.33
 Net interest income 3,758 3,335
 Net interest yield 2.41 pct. 2.25 pct.
 Return on average assets 0.69 pct. 0.34 pct.
 Return on average equity 12.91 pct. 5.85 pct.
 6 mos. ended June 30 1992 1991
 Net earnings (loss) $ (889) $1,218
 Net earnings (loss) per share (0.54) 0.75
 Net interest income 6,933 5,893
 Net interest yield 2.25 pct. 2.09 pct.
 Return on average assets -0.26 pct. 0.41 pct.
 Return on average equity -4.74 pct. 6.82 pct.
 6/30/92 12/31/91 6/30/91
 Total Assets $686,244 $665,295 $620,251
 Loans, net 317,247 274,066 284,259
 Mortgage-backed securities 222,135 188,203 216,746
 Investments 18,281 17,120 22,520
 Assets held for sale 54,782 78,712 37,820
 Deposits 522,243 512,478 469,688
 Non-performing assets 12,376 15,809 8,823
 Stockholders' equity 36,972 37,949 36,006
 Equity to total assets 5.39 pct. 5.70 pct. 5.81 pct.
 Book value per share $ 22.61 $ 23.20 $ 22.02
 -0- 7/21/92
 /CONTACT: Dale E. Johnson, chief financial officer, 404-370-8686, or Lynne Pressley, vice president, 404-370-8558, both of Prime Bancshares/
 (PMB) CO: Prime Bancshares, Inc. ST: Georgia IN: FIN SU: ERN


BN-BR -- AT010 -- 1257 07/21/92 11:06 EDT
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