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SECURITY PACIFIC CORPORATION ANNOUNCES 1992 FIRST QUARTER RESULTS

SECURITY PACIFIC CORPORATION ANNOUNCES 1992 FIRST QUARTER RESULTS
 LOS ANGELES, April 16 /PRNewswire/ -- Security Pacific Corporation (NYSE: SPC) today reported a 1992 first quarter loss of $496.3 million, or $3.93 per common share. This compares to net income of $96.5 million, or $0.71 per common share, in the first quarter of 1991.
 Security Pacific chairman and chief executive officer, Robert H. Smith, said, "This is the last time that we expect to report operating results as our merger with BankAmerica Corporation is expected to close on or about April 22." Smith noted that, "The quarter's results reflect the continued impact of prolonged adverse economic conditions in several of the Corporation's key markets." He also said, "The quarterly loss was increased by our inability to recognize tax benefits for all of the pre-tax losses in the quarter."
 Fully taxable equivalent net interest income for the first quarter was $643.0 million, down $79.2 million, or 11 percent, from the year-ago quarter. This decrease reflected a $9.8 billion, or 13 percent, decrease in average earning assets from the first quarter of last year. The net interest margin in the first quarter was 4.00 percent, unchanged from the fourth quarter level but higher than the 3.91 percent in the first quarter of 1991.
 As a result of planned asset reductions, primarily during 1991, and weak business loan demand, first quarter average total assets declined $3.1 billion, or 4 percent, from the fourth quarter level, and were down $11.1 billion, or 13 percent, from a year-ago. During the first quarter, approximately $800 million of 1-4 family residential mortgage loans and consumer loans were securitized and sold. Average total loans and leases in the first quarter declined $11.4 billion, or 17 percent, from the year-ago quarter. Real estate loans, primarily 1-4 family residential mortgages, decreased $0.9 billion, or 6 percent, and other consumer loans were down $3.8 billion, or 27 percent, both reflecting loan securitizations and sales. Domestic business loans decreased $4.3 billion, or 18 percent, while lease financing was down $0.2 billion, or 5 percent. Ready ReserveAccount/charge card loans increased $0.7 billion from the year-ago quarter, reflecting the maturity of a year-end 1989 securitization. International loans were down $2.9 billion, or 32 percent, from the year-ago quarter, primarily reflecting the decision at the end of 1990 to disband the Merchant Bank. First quarter average other earning assets increased $1.6 billion, or 23 percent, from a year ago due to an increase in federal funds sold.
 Non-interest income in the first quarter was $371.4 million, down $178.4 million, or 32 percent, from the year-ago quarter. The primary contributors to this decline were a $114.2 million reduction in gains on sales of loans, a $81.4 million decline in the all other income category, and a $14.1 million decline in trading profits. A net loss of $6.7 million was recognized on loan sales in the current quarter reflecting a $18 million adjustment for earlier than expected prepayments on homeowner equity loans securitized and sold during 1991, while the year-ago quarter reflected gains of $107.5 million. The decline in the all other income category in the current quarter included a provision for losses expected from the sale or closure of certain subsidiaries, including $53 million for the anticipated sale of the Hoare Govett subsidiaries, and lower corporate advisory fees than a year ago. These declines were partially offset by increases of $13.2 million in gains on sales of equity securities within the Venture Capital Group, $12.1 million in foreign exchange gains, and $11.3 million in service charges on deposits.
 The first quarter provision for credit losses of $786.8 million was $515.7 million above the year-ago provision, and $238.7 million greater than net credit losses. Net credit losses in the current quarter totaled $548.1 million which included $78.2 million of consumer loan charge-offs associated with a change in policy which recognizes certain consumer losses earlier than the policy previously followed. Excluding those associated with the policy change, net credit losses would have totaled $469.9 million, or 3.36 percent of related outstandings on an annualized basis, down from $548.8 million, or 3.67 percent, in the fourth quarter, but up from $224.6 million, or 1.34 percent, in the first quarter of 1991. The categories primarily responsible for the increase in net credit losses (excluding those associated with the policy change) from the year-ago first quarter were domestic business loans excluding commercial real estate, up $157.3 million, international loans other than developing country (primarily United Kingdom), up $82.7 million, and commercial real estate loans, up $42.1 million. These increases were partially offset by a decline of $51.4 million in credit losses associated with developing country debt as the Corporation eliminated its non-trade related developing country portfolio in the first quarter of 1991.
 The reserve for credit losses was $2,748.0 million at March 31, 1992, and represented 5.0 percent of outstandings, up from 4.3 percent at the end of 1991, and 2.2 percent at the end of the 1991 first quarter. At March 31, 1992, the reserve as a percent of non-performing loans was 80 percent, compared to 91 percent at year end and 63 percent a year ago.
 Non-performing loans and leases totaled $3,456 million at March 31, 1992, and represented 6.3 percent of period-end loans and leases, up $703 million from $2,753 million, or 4.7 percent, at year-end 1991, and higher than the 3.6 percent, or $2,316 million, at the end of the 1991 first quarter. The increase in the current quarter reflected increases of $416 million in domestic commercial real estate-related credits, $175 million in all other domestic credits, primarily business loans, and $112 million in international credits, the majority of which were in the United Kingdom and Australia. Other real estate owned totaled $1,608 million at March 31, 1992, down $21 million from year end, but $679 million above a year ago.
 Non-interest expense, composed of staff and other expense, totaled $860.4 million in the first quarter, up $32.1 million, or 4 percent, from last year's first quarter. This increase is attributable to net other real estate owned costs which totaled $103.6 million in the current quarter, up $96.2 million from the year-ago quarter. Excluding net other real estate owned costs, non-interest expense declined $64.1 million, or 8 percent. Staff expense decreased 6 percent from the year-ago quarter reflecting an approximate 3,000, or 8 percent, decline in full-time equivalent staff. Other expense, excluding net other real estate owned costs, decreased $40.2 million, or 10 percent, reflecting declines in most categories except deposit insurance fees which increased $3.6 million, or 14 percent, due primarily to the mid-1991 increase in premium rates.
 The Corporation recognized only a partial income tax benefit for the first quarter 1992 pre-tax loss of $639.3 million. The tax benefit recognized totaled $143.0 million, or 22.4 percent, of the pre-tax loss.
 SECURITY PACIFIC CORPORATION AND SUBSIDIARIES
 (Unaudited)
 (Dollars in Millions, Except Per Share Amounts)
 3 Months
 Ended March 31,
 pct
 1992 1991 change
 Earnings Summary
 Net interest income (1) $ 643.0 $ 722.2 (11)
 Non-interest income 371.4 549.8 (32)
 Less provision for credit
 losses 786.8 271.1 190
 Less non-interest expense:
 Staff expense 392.1 416.0 (6)
 Other expense 468.3 412.3 14
 Total 860.4 828.3 4
 Income (loss) before
 income taxes (1) (632.8) 172.6 (467)
 Less adjustment (1) 6.5 9.1 (29)
 Less income tax expense
 (benefit) (143.0) 67.0 (313)
 Net income (loss) $ (496.3) $ 96.5 (614)
 Less preferred
 dividends 8.3 8.3 0
 Net income (loss)
 applicable to
 common stock $ (504.6) $ 88.2 (672)
 Average common shares
 (millions) 128.3 125.0 3
 Net income (loss) per
 common share $ (3.93) $ 0.71 (654)
 Dividends per common
 share -- 0.63 (100)
 Book value per common
 share (period end) 20.78 32.68 (36)
 Net interest margin (1) 4.00 pct 3.91 pct
 Return on average assets (2.69) pct 0.45 pct
 Return on average common
 equity (65.6) pct 8.6 pct
 At March 31,
 pct
 Balance Sheet Summary 1992 1991 change
 Total assets $ 72,873 $ 83,096 (12)
 Total deposits 52,270 57,408 (9)
 Domestic demand deposits 12,877 11,333 14
 Domestic interest
 checking deposits 6,132 5,766 6
 Domestic insured
 money market deposits 9,755 8,131 20
 Domestic savings deposits 5,170 4,687 10
 Domestic time deposits 15,098 20,667 (27)
 International deposits 3,418 6,824 (50)
 Loans and lease financing 54,818 65,022 (16)
 Investment securities 2,589 3,237 (20)
 Stockholders' equity 2,971 4,407 (33)
 (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- 4/16/92
 /CONTACT: Deborah K. Lewis of Security Pacific Corporation, 213-345-5504/
 (SPC) CO: Security Pacific Corporation ST: California IN: FIN SU: ERN


CH -- LA006 -- 9118 04/16/92 09:22 EDT
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