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SECOND NATIONAL INCREASES LOAN LOSS RESERVES; REPORTS THIRD-QUARTER LOSS; SLIGHT RISE IN NON-PERFORMERS

            SECOND NATIONAL INCREASES LOAN LOSS RESERVES;
      REPORTS THIRD-QUARTER LOSS; SLIGHT RISE IN NON-PERFORMERS
    SALISBURY, Md., Nov. 1 /PRNewswire/ -- For the three months ended Sept. 30, 1991, Second National Bancorporation (NASDAQ-NMS: SNLB) reported a loss of $21.0 million, or $2.85 per share.  This compares with a 1990 third-quarter loss of $16.9 million, or $2.33 per share. For the nine months ended Sept. 30, 1991, the company reported a loss of $21.4 million, or $2.91 per share, compared to the $12.5 million, or $1.82 per share, loss reported a year ago.  The level of non-performing assets stabilized, increasing only marginally to $201 million, from $195 million at June 30, 1991.
    The loss resulted from an increase to general and specific loan loss reserves of $29.7 million during the three months ended Sept. 30, 1991, and $33.8 million for the nine months.  General loan loss reserves now total $27.2 million, while specific reserves total $16.4 million, for a total loan loss reserve balance of $43.6 million.  The losses were partially offset by an extraordinary gain of $3.8 million, resulting from the restructuring and partial prepayment during the quarter of $12 million in subordinated debentures.
    The reserve additions were determined by management after a review of all major loans by representatives of the Office of Thrift Supervision and the Federal Deposit Insurance Corporation, which have now completed the substantive portion of the fieldwork for their annual examinations.
    "The uncertain economic recovery and restricted credit availability contribute to the continued deterioration of the commercial real estate markets in the mid-Atlantic region.  We have however, begun to see some upturn in residential real estate, particularly on housing in the lower and mid-price ranges.  While current economic conditions make it difficult for banks and regulators to agree on the fair market value of certain types of real estate, we believe the additions to our loan reserves, combined with operational changes will assist in restoring profitability.  Our debt restructurings, which added over $7 million to core and tangible capital and reduced future cash outlays by over $3.5 million annually, were among the more significant developments during the quarter," said Henry A. Berliner Jr., president and chief executive officer.
    Second National has been operating under an approved Capital Plan since March of 1991.  The loan loss reserve additions, which will initially cause the company to fall less than $500,000 short of tangible capital requirement, will be reflected in a revised Capital Plan.  The Plan will also reflect the company's capital restructurings and other operational changes.  The company intends to submit the revisions to the Office of Thrift Supervision in November.
    Assets at Sept. 30 stood at $1.69 billion vs. $1.78 billion at this time a year ago.
    Second National Federal Savings Bank operates 34 full-service banking offices in Maryland, Delaware, Pennsylvania, Virginia and Washington.
    -0-                     11/1/91
    /CONTACT:  Henry A. Berliner Jr., president and CEO, 301-266-9200, or 800-888-5100, or William T. Russell, III, chief financial officer, 301-749-8415, or 800-284-2628, both of Second National Federal Savings Bank/
    (SNLB) CO:  Second National Federal Savings Bank ST:  Maryland IN:  FIN SU:  ERN MH-TW -- DC028 -- 0405 11/01/91 16:49 EST
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Publication:PR Newswire
Date:Nov 1, 1991
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