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SHAWMUT NATIONAL CORPORATION REPORTS FIRST QUARTER NET INCOME OF $36 MILLION, OR $.35 PER COMMON SHARE

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                             EARNINGS SUMMARY
                                1Q93     4Q92     3Q92    2Q92    1Q92
    Net Income ($mm)          $ 36.3   $ 10.3   $ 13.0   $ 8.6   $ 43.3
    Earnings Per
     Common Share                .35      .08      .14     .09      .58
    Book Value Per
     Common Share
     (Quarter End)             14.45    14.09    14.11    13.90   14.26
    Return on Average
     Common Equity (pct.)       9.62     2.18     3.88     2.65   16.08
    Return on Average
     Assets (pct.)               .62      .17      .23      .16     .80 -------------------------------------------------------------------
    HARTFORD, Conn., and BOSTON, April 19 /PRNewswire/ -- Shawmut National Corporation (NYSE: SNC) reported net income for the first quarter of 1993 of $36.3 million, or $.35 per common share, a decrease of $7.0 million or 16 percent, from the $43.3 million, or $.58 per common share, of net income reported in the first quarter of last year.  Last year's first quarter included $68.4 million in securities gains and a gain of $9.7 million from the sale of home equity loan pass-through certificates.  This year's first quarter included $5.1 million in securities gains.
    Four special items influenced first quarter 1993 earnings:  (a) restructuring charges totaling $36 million primarily relating to branch closings and personnel reductions, (b) a $20 million provision for foreclosed properties related to the anticipated bulk sale of $250-$350 million of real estate loans and foreclosed properties, (c) a $14 million writedown in the value of excess servicing rights in various securitized loan portfolios, and (d) a credit of $53 million representing the cumulative effect of an accounting change resulting from the corporation's adoption of the Financial Accounting Standards Board's new accounting standard for income taxes (FAS 109).  Excluding these four special items, net income would have been approximately $32.8 million, or $.31 per common share.
    Nonaccruing loans plus foreclosed properties (problem assets) declined to $777.1 million at March 31, 1993, a decline of $85.3 million, or 10 percent, from $862.4 million at December 31, 1992. Nonaccruing loans plus foreclosed properties were $1.368 billion at March 31, 1992.  Thirty-one percent of nonaccruing loans were less than 30 days past due and 40 percent were less than 90 days past due on March 31, 1993.
    The ratio of problem assets to loans plus foreclosed properties was 5.12 percent at March 31, 1993, down from 5.69 percent on Dec. 31, 1992.  The loan loss reserve was 139 percent of nonaccruing loans at March 31, 1993, compared with 140 percent at year end 1992.  This reserve coverage ratio is expected to improve after the closing of the anticipated bulk sale.
    Shawmut announced its intent to sell $250-$350 million of real estate loans and foreclosed properties in a bulk sale expected to occur late in the second quarter or early in the third quarter of 1993.  The sale will include accruing, nonaccruing and restructured real estate loans.  The loan loss reserve is expected to be adequate to absorb any discount from the carrying value for the loans to be sold.
    A $20 million special foreclosed properties provision was taken in the first quarter of 1993 in respect of the foreclosed properties to be included in the bulk sale.  The bulk sale is not expected to have any negative effect on earnings in subsequent quarters.
    "The first quarter of 1993 was Shawmut's 7th consecutive quarter of profitability, with core earnings of $77.7 million", said Joel B. Alvord, chairman and chief executive officer.  Core earnings are defined as earnings before credit costs, taxes and special items. Core earnings were $76.8 million in the fourth quarter of 1992 and $65.6 million in the first quarter of 1992.
    "A series of restructuring decisions were made in the first quarter which are designed to bring greater efficiency to Shawmut's operations," Alvord continued.  "We are accelerating the closing and consolidation of branches as we continue to focus on the efficiency of our delivery network.  This action, along with personnel reductions in data processing and operations, corporate staff and services, and credit administration, is expected to result in staff reductions of approximately 500 full-time equivalent employees by year-end 1993.  Total annualized savings are expected to exceed $50 million."
    "Increased liquidity in the market for real estate assets is providing an attractive opportunity to accelerate the resolution of these assets," Alvord said.  "The bulk sale is expected to reduce costs associated with managing problem assets and improve the Corporation's flexibility in pursuing growth opportunities."
                     INCOME STATEMENT HIGHLIGHTS
    ($ in millions)            1Q93     4Q92     3Q92    2Q92    1Q92
    Net Interest Income (T-E)$ 215.5  $ 229.5  $ 210.9 $ 203.2 $ 197.0
    Tax Equivalent Adjustment   (3.3)    (3.7)    (3.5)   (3.9)   (4.2)
    Net Interest Income        212.2    225.8    207.4   199.3   192.8
    Noninterest Income (a)      95.5     86.8     94.3    96.5    92.3
    Noninterest Expense (b)    230.0    235.8    225.3   221.6   219.5
    Core Earnings               77.7     76.8     76.4    74.2    65.6
    Credit Costs
    Provision for Loan Losses   12.2     28.7     43.6    48.7    68.5
    Provision for Foreclosed
     Properties                 43.1     43.8     30.4    29.2    30.8
    Total Credit Costs          55.3     72.5     74.0    77.9    99.3
    Securities Gains             5.1      6.3     11.2     --     68.4
    Nonrecurring Gains           --       --       --     12.6     9.7
    Special Expenses            50.4      --       --      --      --
    Pre-Tax Income (Loss)      (22.9)    10.6     13.6     8.9    44.4
    Income Taxes (Benefit)     ( 6.4)     3.5      3.6     2.5    11.1
    Income (Loss) Before
     Accounting Change &
     Extraordinary Credit      (16.5)     7.1     10.0     6.4    33.3
    Cumulative Effect of
     Accounting Change          52.8       --      --       --     --
    Extraordinary Credit         --       3.2      3.0     2.2    10.0
    Net Income               $  36.3  $  10.3  $  13.0 $   8.6 $  43.3
    Net Interest Margin (pct)   4.01     4.32     4.16    4.10    4.02
    Efficiency Ratio (pct)      73.9     74.5     73.8    73.9    75.8
                              PER COMMON SHARE DATA:
    Income (Loss) before
     Accounting Change &
     Extraordinary Credit        (.22)    .04      .10      .07    .44
    Net Income                    .35     .08      .14      .09    .58
    (a) Excludes securities and nonrecurring gains.
    (b) Excludes provision for foreclosed properties and special
        expenses.
    Net interest income on a tax-equivalent basis was $215.5 million in the first quarter of 1993, an increase of $18.5 million, or 9 percent, from the first quarter of 1992.  The increase in net interest income reflects an increase in interest-earning assets, a higher level of capital and the decline in the level of problem assets.  Net interest income declined $14.0 million, or 6 percent, from the fourth quarter due to declining spreads in the Corporation's portfolio of U.S. Treasury securities.  Average interest-earning assets were $21.6 billion in the first quarter of 1993, up $0.5 billion from the previous quarter and up $1.9 billion from $19.7 billion a year ago.
                    RESERVE FOR LOAN LOSSES SUMMARY
    ($ in millions)            1Q93     4Q92     3Q92    2Q92    1Q92
    Balance at Beginning
     of Period             $ 863.0  $ 893.0  $ 955.0  $ 985.0 $1,000.0
    Net Charge-offs           49.2     58.7    105.6     78.7     83.5
    Provision for
     Loan Losses              12.2     28.7     43.6     48.7     68.5
    Balance at End
     of Period             $ 826.0  $ 863.0  $ 893.0  $ 955.0 $  985.0
    Provision for Foreclosed Properties:
    Total                  $  43.1  $  43.8  $  30.4  $  29.2 $   30.8
    Excluding Special
     Provisions (a)        $  15.5  $  22.9  $  27.7  $  29.2 $   30.8
    (a)Special provisions include charges for bulk sales, auctions and
       estimated selling costs.
    The provision for loan losses was $12.2 million in the first quarter of 1993, down $16.5 million, or 57 percent, from the level in the fourth quarter of 1992 and down $56.3 million, or 82 percent, from the $68.5 million provision for loan losses in the first quarter of 1992.  Net charge-offs were $49.2 million in the first quarter of 1993, compared with $58.7 million in the fourth quarter of 1992 and $83.5 million in the same quarter a year ago.
    The reserve for loan losses was $826 million at March 31, 1993, compared with $863 million at Dec. 31, 1992 and $985 million at March 31, 1992.  Reserve coverage remained strong as the ratio of the reserve for loan losses to nonaccruing loans was 139 percent at the end of the first quarter of 1993, compared with 101 percent a year earlier. Reserve coverage was 140 percent at Dec. 31, 1992.
                                 ASSET QUALITY
    ($ in millions)            1Q93     4Q92     3Q92    2Q92    1Q92
    Nonaccruing Loans         $595.7  $618.0 $  735.3 $  926.2 $  977.2
    Foreclosed Properties      181.4   244.4    332.7    400.8    391.0
    Total Problem Assets       777.1   862.4  1,068.0  1,327.0  1,368.2
    Restructured Loans         145.2   165.0    130.2    118.9    107.5
    Accruing Loans Past Due
     90 days or More            51.0    42.6     64.8     59.8     65.8
    Problem Assets as a
     Percent of Loans plus
     Foreclosed Properties   5.12pct  5.69 pct 7.63 pct 9.50pct 9.50pct
    Reserve as a Percent of
     Nonaccruing Loans       139 pct  140 pct 121 pct  103 pct  101 pct
    Problem Asset Flows
    Inflows                   $138.5  $139.7   $117.7   $199.4   $228.1
    Outflows *                $143.2  $244.4   $230.9   $136.5   $157.3
    (a) Outflows are cash payments, transfers to accruing or to
        restructured, or sales
    Problem assets at March 31, 1993 declined to $777.1 million, down $85.3 million, or 10 percent, from the fourth quarter of 1992 and down $591.1 million, or 43 percent, from $1.368 billion a year ago. The ratio of problem assets to loans plus foreclosed properties improved to 5.12 percent at March 31, 1993, compared with 5.69 percent at Dec. 31, 1992 and 9.50 percent at March 31, 1992.
                         NONINTEREST INCOME
    ($ in millions)            1Q93     4Q92     3Q92    2Q92    1Q92
    Customer Service Fees     $ 43.5   $ 39.0   $ 41.4  $ 43.5  $ 43.9
    Trust and Agency Fees       28.6     29.0     28.4    29.3    28.4
    Loan Servicing               3.5      4.6      4.5     7.1     3.7
    Foreign Exchange              .1      2.8      2.6     2.3     1.7
    Trading Account Profits      1.8      1.7      1.6     1.9     1.4
    Other                       18.0      9.7     15.8    12.4    13.2
     Subtotal                   95.5     86.8     94.3    96.5    92.3
    Nonrecurring Gains           --       --       --     12.6     9.7
    Securities Gains             5.1      6.3     11.2     --     68.4
    Total Noninterest income  $100.6   $ 93.1   $105.5  $109.1  $170.4
    Noninterest income, excluding securities and other nonrecurring gains, was $95.5 million in the first quarter of 1993 compared with $92.3 million in the same quarter of 1992.  The corporation's mortgage banking subsidiary experienced a significant volume of mortgage refinancing activity in the first quarter of 1993 leading to a higher level of origination fees.  Noninterest income, excluding securities and nonrecurring gains, for the fourth quarter of 1992 was $86.8 million.  In addition to the refinancing activity, the significant decline in interest rates during the first quarter of 1993 lead to a higher level of gains on the sale of mortgage loans, compared with sale activity during the fourth quarter of 1992.
                         NONINTEREST EXPENSES
    ($ in millions)            1Q93     4Q92     3Q92    2Q92    1Q92
    Compensation              $ 92.4   $ 94.5   $ 91.5  $ 91.2  $ 89.3
    Employee Benefits           19.2     15.5     14.7    16.8    16.9
    Occupancy                   24.4     23.6     23.5    24.7    25.8
    Equipment                   15.1     15.0     15.0    14.0    14.8
    Foreclosed Properties
     Expense                     9.9      9.9      8.1     7.7     7.2
    Communication               10.4      9.6     10.0    10.0    11.2
    FDIC Insurance              11.2      9.1      9.1     9.2     9.4
    Advertising                  6.4      3.6      3.8     2.9     2.9
    Other                       41.0     55.0     49.6    45.1    42.0
     Subtotal                  230.0    235.8    225.3   221.6   219.5
    Special Expenses            50.4      --       --      --      --
    Provision for Foreclosed
     Properties                 43.1     43.8     30.4    29.2    30.8
    Total Noninterest
     Expenses                 $323.5   $279.6   $255.7  $250.8  $250.3
    Noninterest expenses (excluding the provision for foreclosed properties and special expenses) in the first quarter of 1993 were $230.0 million, compared with $219.5 million in the first quarter of 1992, an increase of $10.5 million, or 5 percent.  The Corporation adopted FAS 106, a new accounting standard for employee postretirement health care and life insurance benefits, effective Jan. 1, 1993, which resulted in an increase in employee benefits expense of $4.0 million.  FDIC insurance expense also increased due to higher premiums as well as a higher level of insurable deposits. The corporation's principal banking subsidiaries launched an extensive promotional campaign to introduce new mutual fund products and to introduce the Shawmut name to the Connecticut banking franchise.  Noninterest expenses (excluding the provision for foreclosed properties and special expenses) decreased $5.8 million, or 2 percent, compared with the fourth quarter of 1992.
                                   CAPITAL
    ($ in millions, except
     per share data)            1Q93     4Q92     3Q92    2Q92    1Q92
    Common Equity             $1,346   $1,304   $1,292  $1,269  $1,055
    Tangible Common Equity (a) 1,236    1,193    1,179   1,155     939
    Total Shareholders' Equity 1,525    1,482    1,327   1,304   1,090
    Tier 1 Capital (b)         1,415    1,371    1,215   1,190     974
    Total Capital (b)          2,174    2,164    1,859   1,836   1,659
    Common Equity Ratio     5.37 pct 5.16 pct 5.56 pct 5.61 pct 4.65 pct
    Tangible Common Ratio       4.93     4.74     5.10    5.13    4.16
    Tier 1 Capital Ratio (b)    7.54     7.52     7.38    7.24    5.72
    Total Capital Ratio (b)    11.59    11.87    11.30   11.17    9.74
    Leverage Ratio              5.97     5.90     5.51    5.43    4.50
    Book Value Per Share     $ 14.45  $ 14.09  $ 14.11 $ 13.90 $ 14.26
    Goodwill                      110      111      113     114     116
    Total Assets               25,073   25,288   23,229  22,639  22,692
    (a) Defined as common equity less goowill.
    (b) As a percent of preliminary risk adjusted assets.  First quarter
        1993 data are preliminary.
    Tier 1 and Total capital were 7.54 percent and 11.59 percent at March 31, 1993, respectively, compared with 7.52 percent and 11.87 percent at December 31, 1992, respectively.  The Leverage ratio, a measure of Tier 1 capital to total quarterly average assets, increased to 5.97 percent at March 31, 1992 from 5.90 percent at December 31, 1992.  The Corporation's and principal banking subsidiaries' risk-based capital and leverage ratios continue to exceed the ratios for a well capitalized institution.
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Publication:PR Newswire
Date:Apr 19, 1993
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