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SECURITY PACIFIC CORPORATION ANNOUNCES 1991 FOURTH QUARTER AND FULL-YEAR RESULTS

 SECURITY PACIFIC CORPORATION ANNOUNCES
 1991 FOURTH QUARTER AND FULL-YEAR RESULTS
 LOS ANGELES, Jan. 21 /PRNewswire/ -- Security Pacific Corporation (NYSE: SPC) today reported a 1991 fourth quarter net loss of $409.2 million, or $3.28 per common share, compared to a net loss of $357.6 million, or $3.15 per common share, in the fourth quarter of 1990. For all of 1991, the net loss was $774.5 million, or $6.37 per common share, compared to net income of $161.3 million, or $1.03 per common share, earned in 1991.
 Security Pacific Chairman and Chief Executive Officer Robert H. Smith, said, "These results are consistent with the preliminary results announced Jan. 16, 1992, and reflect the continued impact of adverse economic conditions in several of our key markets, and maintenance of strong reserves for credit losses. The reserve as a percentage of total loans and leases increased to 4.3 percent from 3.9 percent at the end of September. The ratio of the reserve to non-performing loans increased to 91 percent from 87 percent, and is one of the highest of the largest bank holding companies."
 Smith repeated his comment of last week that, "BankAmerica has advised Security Pacific that the results reported by Security Pacific for the fourth quarter regarding the provision for credit losses, net credit losses, and non-performing assets, do not alter BankAmerica's assessment of the overall benefits of the planned merger. Both companies are proceeding with the regulatory filings necessary to effectuate the merger."
 Commenting further on fourth quarter results, Smith, said, "Maintaining a strong reserve is necessary in view of continued adverse economic conditions in several of our key markets, including California. The California economy continues to lag a very slow national economic recovery with the timing and strength of recovery in California still uncertain. Non-performing loans increased $59 million in the fourth quarter, whereas total non-performing assets were up $377 million, reflecting a $318 million increase in other real estate owned. The extent of any improvement in credit quality measures in 1992 will depend on economic conditions. However, while it is currently expected that 1992 first quarter non-performing assets will continue at high levels, net credit losses are anticipated to be below recent levels."
 Fully taxable equivalent net interest income for the fourth quarter was $675.6 million, down $107.7 million, or 14 percent, from the year-ago quarter. This decrease reflected a $12.0 billion, or 15 percent, decrease in average earning assets from the fourth quarter of last year. The net interest margin in the fourth quarter was 4.00 percent, up from 3.97 percent in both the 1991 third quarter and year-ago fourth quarter. On a year-to-date basis, net interest income totaled $2,776.5 million, a decrease of 10 percent from a year ago. This decrease reflected the impact of loan securitizations and sales, declines in other earning assets, as well as a higher negative impact from non-performing assets.
 As a result of a planned asset reduction program, fourth quarter average total assets declined $2.6 billion, or 3 percent, from the third quarter level, and were down $13.6 billion, or 15 percent, from the year-ago quarter. The current quarter reduction reflected the securitization and sale of about $1.5 billion in several consumer loan and 1-4 family residential mortgage portfolios. Average total loans and leases in the fourth quarter declined $9.5 billion, or 14 percent, from the year-ago quarter, reflecting the impact of the securitization and sale of about $8.3 billion in various domestic loans during 1991. Real estate loans, primarily 1-4 family residential mortgages, decreased $2.0 billion, or 13 percent, and other consumer loans were down $4.1 billion, or 28 percent, both reflecting loan securitizations and sales. Domestic business loans decreased $1.5 billion, or 6 percent, while lease financing was down $0.1 billion, or 3 percent. Ready ReservAccount/charge card loans increased $0.3 billion, or 37 percent, reflecting the maturity of a year-end 1989 securitization. International loans were down $2.0 billion, or 22 percent from the year-ago quarter, primarily reflecting the decision in the year-ago quarter to disband the Merchant Bank. Fourth quarter average other earning assets were down $2.5 billion, or 28 percent, from a year ago related to planned asset reductions primarily in the trading account assets, due from banks--interest bearing, and investment securities categories.
 Non-interest income for the fourth quarter was $445.0 million, up $21.6 million, or 5 percent, from the year-ago quarter. Contributing to the increase was a $25.5 million increase in trading profits, a $17.7 million increase in loan servicing income, and an $11.1 million increase in gains on sales of equity securities. Partially offsetting these increases were an $11.0 million decline in foreign exchange gains, a $9.1 million decrease in investment security gains, as the current quarter included a $14.2 million loss on investment securities, and a $10.4 million decrease in the all other non-interest income category. On a year-to-date basis, 1991 non-interest income totaled $2,206.7 million, an increase of 17 percent from 1990, primarily reflecting gains and servicing income from the securitization and sale of loans related to planned asset reductions.
 The 1991 fourth quarter provision for credit losses of $731.0 million was $106.4 million above the year-ago provision, and $182.1 million greater than net credit losses. On an annual basis, the provision totaled $2,617.9 million, or $1,452.0 million higher than in 1990. Net credit losses in the current quarter totaled $548.9 million, or 3.67 percent of related outstandings on an annualized basis, up from $402.5 million, or 2.33 percent, in the year-ago quarter. On an annual basis, net credit losses (excluding developing country debt) totaled $1,425.0 million, or 2.24 percent of related outstandings, up from $815.8 million, or 1.22 percent, for 1990. Quarterly and year-to-date increases in net credit losses and provision for credit losses reflected continued economic weakness in California and the remainder of the United States, the United Kingdom and Australia, and the resultant impact on commercial real estate markets. There also continues to be uncertainty regarding the timing and strength of the recovery in California. For all of 1991, developing country net credit losses totaled $48.5 million, as the Corporation eliminated its remaining non-trade related credit exposure to developing countries during the 1991 first quarter.
 The reserve for credit losses was $2,518.6 million at Dec. 31, 1991, and represented 4.3 percent of outstandings, up from 3.9 percent at the end of the 1991 third quarter, and 2.2 percent a year ago. At Dec. 31, 1991, the reserve as a percent of non-performing loans was 91 percent, up from 87 percent at the end of the 1991 third quarter, and 70 percent at the end of 1990.
 Non-performing loans and leases totaled $2,753 million at Dec. 31, 1991, and represented 4.7 percent of period-end loans and leases, up $59 million from $2,694 million, or 4.5 percent, at the end of the third quarter, and higher than the 3.1 percent, or $2,070 million, in the year-ago quarter. Other real estate owned totaled $1,629 million at Dec. 31, 1991, up $318 million from the 1991 third quarter, and $905 million from the end of 1990.
 Current quarter non-interest expense, composed of staff and other expense, totaled $883.9 million, down 5 percent from the year-ago period excluding last year's $200 million fourth quarter restructuring expense associated with the disbandment of the Merchant Bank, net other real estate owned costs, and deposit insurance fees. Staff expense decreased 3 percent from the year-ago quarter reflecting a 4,100, or 10 percent, decline in full-time equivalent staff from the year-ago figure. Other expense decreased $15.7 million, or 3 percent, from the prior-year quarter reflecting declines in most expense categories except deposit insurance fees. Net other real estate owned costs totaled $87.2 million in the current quarter, down $41.9 million from the 1991 third quarter, but little changed from the fourth quarter of last year. On a year-to-date basis, total non-interest expense, excluding last year's $200 million fourth quarter restructuring charge, was up 5 percent from last year, but down about one percent after also excluding net other real estate owned costs and deposit insurance fees.
 The current quarter reflected a tax benefit of $97.1 million. The quarter results included a $65 million after tax write-down of the Corporation's investment in Hoare Govett, reflecting a decision in the quarter to sell the business rather than pursue a partial management buy-out of the company. Substantially all of this loss was reflected in income taxes. In addition, the Corporation was not able to recognize tax benefits on some of the operating losses in its overseas subsidiaries.
 Total stockholders' equity at Dec. 31, 1991, was $3,470 million. The year-end Tier I capital ratio (based on 1992 rules) was an estimated 4.0 percent, compared to 4.4 percent at the end of the 1991 third quarter, and 4.1 percent at the end of 1990.
 SECURITY PACIFIC CORPORATION AND SUBSIDIARIES
 (Unaudited)
 (Dollars in Millions, Except Per Share Amounts)
 3 Months
 Ended December 31,
 pct
 1991 1990 change
 Earnings Summary
 Net interest income (1) $ 675.6 $ 783.3 (14)
 Non-interest income 445.0 423.4 5
 Less provision for credit
 losses 731.0 624.6 17
 Less non-interest expense:
 Staff expense 378.6 390.5 (3)
 Restructuring expense -- 200.0 (100)
 Other expense 505.3 521.0 (3)
 Total 883.9 1,111.5 (20)
 Income (loss) before
 income taxes (1) (494.3) (529.4) (7)
 Less adjustment (1) 12.0 10.8 11
 Less income tax expense
 (benefit) (97.1) (182.6) (47)
 Net income (loss) $ (409.2) $ 357.6) 14
 Less preferred
 dividends 8.4 12.5 (33)
 Net income (loss)
 applicable to common
 stock $ (417.6) $ (370.1) 13
 Average common shares
 (millions) 128.1 123.2 4
 Net income (loss) per
 common share $ (3.28) $ (3.15) 4
 Dividends per common
 share -- 0.63 (100)
 Net interest margin (1) 4.00 pct 3.97 pct
 Return on average assets (2.12) pct (1.58) pct
 Return on average common
 equity (47.4) pct (33.8) pct
 (1) Includes amounts to convert non-taxable income, primarily securities income, to a fully taxable equivalent basis and to add the pre-tax equivalent of investment credits on leasing activities to interest income. A portion of cash and due from banks balances have been included in earning assets for purposes of computing the net interest margin.
 SECURITY PACIFIC CORPORATION AND SUBSIDIARIES
 (Unaudited)
 (Dollars in Millions, Except Per Share Amounts)
 12 Months
 Ended December 31,
 pct
 1991 1990 change
 Earnings Summary
 Net interest income (1) $ 2,776.5 $ 3,081.5 (10)
 Non-interest income 2,206.7 1,881.2 17
 Less provision for credit
 losses 2,617.9 1,165.9 125
 Less non-interest expense:
 Staff expense 1,585.7 1,580.8 0
 Restructuring expense -- 200.0 (100)
 Other expense 1,834.0 1,684.2 9
 Total 3,419.7 3,465.0 (1)
 Income (loss) before income
 taxes (1) (1,054.4) 331.8 (418)
 Less adjustment (1) 37.7 45.3 (17)
 Less income tax expense
 (benefit) (317.6) 125.2 (354)
 Net income (loss) $ (774.5) $ 161.3 (580)
 Less preferred
 dividends 33.3 38.5 (14)
 Net income (loss)
 applicable to common
 stock $ (807.8) $ 122.8 (758)
 Average common shares
 (millions) 126.8 119.2 6
 Net income (loss) per
 common share $ (6.37) $ 1.03 (718)
 Dividends per common
 share 1.39 2.46 (43)
 Book value per common
 share (period end) 24.74 32.75 (24)
 Net interest margin (1) 3.92 pct 3.91 pct
 Return on average assets (0.95) pct 0.18 pct
 Return on average common
 equity (20.4) pct 2.8 pct
 At December 31,
 pct
 Balance Sheet Summary 1991 1990 change
 Total assets $ 76,411 $ 84,731 (10)
 Total deposits 54,228 58,191 (7)
 Domestic demand deposits 13,008 12,455 4
 Domestic interest
 checking deposits 6,282 5,754 9
 Domestic insured money
 market deposits 9,270 7,661 21
 Domestic savings
 deposits 4,933 4,545 9
 Domestic time deposits 16,866 21,317 (21)
 International deposits 3,869 6,459 (40)
 Loans and lease financing 58,620 66,734 (12)
 Investment securities 2,549 3,072 (17)
 Stockholders' equity 3,470 4,708 (26)
 (1) Includes amounts to convert non-taxable income, primarily securities income, to a fully taxable equivalent basis and to add the pre-tax equivalent of investment credits on leasing activities to interest income. A portion of cash and due from banks balances have been included in earning assets for purposes of computing the net interest margin.
 -0- 1/21/92
 /CONTACT: Deborah K. Lewis of Security Pacific, 213-345-5504/
 (SPC) CO: Security Pacific Corporation ST: California IN: FIN SU: ERN


CH -- LA015 -- 1972 01/21/92 15:23 EST
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