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PRIME BANCSHARES RESTATES FIRST QUARTER EARNINGS

 PRIME BANCSHARES RESTATES FIRST QUARTER EARNINGS
 DECATUR, Ga., May 19 /PRNewswire/ -- Prime Bank, Federal Savings


Bank, subsidiary of Prime Bancshares, Inc. (AMEX: PMB), announced today that it has received a directive from the Office of Thrift Supervision (OTS) to redesignate as of March 31 the bank's investment portfolio of mortgage-backed securities and investment securities.
 The OTS directed that the investment portfolio be redesignated to securities Held for Sale. Under generally accepted accounting principles, the redesignation requires that the mortgage-backed securities and investment securities portfolio be reflected at the lower of cost or market value at March 31.
 The redesignation directed by the OTS results in a restatement of financial statements for the first quarter of 1992 to reflect a $4.5 million provision for unrealized loss representing an aggregate decline during the first quarter in the value of the bank's mortgage- backed securities and investment securities. The restatement results in a net operating loss for the first quarter of $2.1 million, instead of net earnings of $739,000 originally reported by Prime Bancshares. The market value of Prime Bank's investment and securities portfolio has increased by approximately $2.1 million since March 31.
 Commenting on the directive, Darrell D. Pittard, president and chief executive officer of Prime Bancshares and the bank, stated: "Proper accounting for investment securities has been the subject of intense discussion among the Financial Accounting Standards Board and bank regulators. It should be emphasized that this provision reflects an unrealized decline in market value rather than an actual loss on sale of securities. Prime Bank continues to maintain a strong capital position of $35.8 million, exceeding all regulatory requirements."
 PRIME BANCSHARES, INC. AND SUBSIDIARY
 Financial Highlights
 (Dollars in thousands, except per share data)
 3 mos. ended March 31 1992 1991
 (unaudited)
 Net earnings (loss) $(2,069) $ 690
 Earnings (loss) per share (1.27) .42
 Earnings before provision for net
 unrealized losses on assets held
 for sale 1,239 915
 Net interest income 3,175 2,557
 Net interest yield 2.10 pct. 1.93 pct.
 Return on average assets (1.23)pct. .48 pct.
 At 3/31/92 3/31/91 12/31/91
 (unaudited)
 Total assets $679,524 $602,056 $665,295
 Loans, net 287,730 255,049 274,066
 Mortgage-backed securities 25,426 220,935 188,203
 Loans, mortgage-backed securities
 and investments held for sale 286,640 53,107 78,712
 Deposits 525,401 437,231 512,478
 Non-performing assets 16,417 10,079 15,809
 Stockholders' equity 35,836 35,523 37,949
 Equity to total assets 5.27 pct. 5.90 pct. 5.70 pct.
 Book value per share $ 21.91 $ 21.72 $ 23.20
 PRIME BANCSHARES, INC.
 Consolidated Statements of Earnings
 ($ in thousands)
 3 mos. ended March 31 1992 1991
 Interest income: (unaudited)
 Interest on loans $ 7,759 $ 7,419
 Interest on mortgage-backed securities 4,687 4,281
 Interest and dividends on investments 594 1,188
 Total interest income 13,040 12,888
 Interest expense:
 Interest on deposits 8,053 7,911
 Interest on FHLB advances 1,059 934
 Interest on bonds payable 580 618
 Interest on other borrowed money 385 868
 Less capitalized interest (212) ---
 Total interest expense 9,865 10,331
 Net interest income 3,175 2,557
 Provision for losses on loans 593 221
 Net interest income after provision
 for losses on loans 2,582 2,336
 Other income:
 Loan fees and service charges 237 448
 Loan servicing fees 181 270
 Gain on sales of loans 991 449
 Gain on sale of loan servicing rights 680 ---
 Gain on sales of mortgage-backed
 securities 739 417
 Gain on sales of investment securities 209 39
 Dividends on FHLB stock 56 74
 Deposit service charges 157 168
 Other income 56 75
 Total other income 3,306 1,940
 Operating expense:
 Salaries and employee benefits 2,060 1,519
 Net occupancy expense of premises 792 661
 Federal insurance premium 282 232
 Data processing expense 100 118
 Advertising and promotion 140 144
 Net losses (gains) related to sales of
 real estate 83 (33)
 Professional and supervisory 153 149
 Write-off of deferred acquisition costs 241 ---
 Other 798 571
 Total operating expenses 4,649 3,361
 Earnings before provision for net
 unrealized losses on assets held
 for sale 1,239 915
 Provision for net unrealized losses on
 assets held for sale 4,533 ---
 Earnings (loss) before income taxes (3,294) 915
 Income tax expense (benefit) (1,225) 225
 Net earnings (loss) $(2,069) $ 690
 Earnings (loss) per share $ (1.27) $ .42
 Consolidated Balance Sheet Data
 ($ in thousands, except per share data)
 At 3/31/92 12/31/91
 ASSETS (unaudited)
 Total cash and cash equivalents $ 26,755 $ 28,764
 Investment securities --- 17,120
 Loans, net 287,730 274,066
 Mortgage-backed securities 25,426 188,203
 Loans, mortgage-backed securities and
 investments held for sale 286,640 78,712
 Receivable for mortgage-backed securities
 sold --- 27,896
 Real estate 13,308 13,254
 Office properties and equipment, net 25,771 22,532
 FHLB stock 3,252 4,233
 Accrued interest receivable 5,041 5,525
 Other assets 5,601 4,990
 Total $679,524 $665,295
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Liabilities
 Deposits $525,401 $512,478
 FHLB advances 57,071 47,071
 Bonds payable, net of discounts 22,729 23,645
 Securities sold under agreements to
 repurchase 25,683 29,536
 Guarantee of indebtedness of ESOP 1,237 1,275
 Advance payments by borrowers for taxes
 and insurance 3,360 2,526
 Deferred income taxes 2,150 3,452
 Accrued expenses and other liabilities 6,057 7,363
 Total liabilities 643,688 627,346
 Stockholders' equity
 Common stock 16 16
 Paid-in capital 15,204 15,204
 Retained earnings 21,853 24,004
 Guarantee of indebtedness of ESOP (1,237) (1,275)
 Total stockholders' equity 35,836 37,949
 Total $679,524 $665,295
 -0- 5/19/92
 /CONTACT: Dale E. Johnson, chief financial officer of Prime Bancshares, 404-370-8686/
 (PMB) CO: Prime Bancshares, Inc. ST: Georgia IN: FIN SU: ERN


BN-EA -- AT020 -- 1942 05/19/92 15:00 EDT
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Date:May 19, 1992
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