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SIGNET BANK MAKES SPECIAL LOAN LOSS PROVISION

 SIGNET BANK MAKES SPECIAL LOAN LOSS PROVISION
 RICHMOND, Va., Dec. 17 /PRNewswire/ -- Signet Banking Corporation


(NYSE: SBK) announced today that it will seek to speed the disposition of real estate assets by making a special provision for losses on loans and foreclosed properties approximating $165 million. The provision will result in an estimated loss of $50-55 million for the current quarter and $25-30 million for 1991. Signet expects to realize during the quarter approximately $60 million of pretax gains on mortgage backed securities sold in anticipation of rising prepayment rates on the underlying mortgages.
 "We expect that 1992 earnings will be significantly improved as a result of this action," said Robert M. Freeman, Chairman and Chief Executive Officer. He also noted that Signet's common equity-to-asset ratio would remain above 6 percent and that the Company's risk-based capital ratios would exceed regulatory minimums by a wide margin. "Our strong capital base gives us the ability to take this aggressive action and still wind up with sound capital
ratios," he said. The Company intends to maintain its quarterly dividend to shareholders at $.20.
 Signet estimated that total non-performing assets at year-end 1991 would not be significantly changed from the level at September 30. The Company also estimated that the allowance for loan losses would cover non-performing loans by approximately 1.6 times.
 "We believe that we are at or very near the peak in our non-performing real estate assets and this action will enable us to move more quickly to get these problems behind us," said Freeman. He indicated that the special provision did not reflect a change in outlook for or valuation of real estate assets, but instead a change in the expected time frame for working out the problem assets.
 "We have been aggressive in the past in recognizing our problem assets and doing something about them," Freeman observed. "Even before taking this action, we had written down our foreclosed properties currently on our books by 27 percent from original loan amount, and our non-performing real estate loans by 14 percent." Signet has already sold over $50 million in troubled real estate assets during 1991, at an average discount of 21 percent.
 Signet has restructured its commercial real estate portfolio into an ongoing unit and a liquidating unit with a separate staff for each. "Our objective is to reduce our real estate assets by at least $400 million, or 25 percent, during the next 12 months," Freeman stated. "The higher reserves will enable us to take heavier discounts on properties we sell and absorb greater losses without impacting future earnings," he said.
 -0- 12/17/91
 /CONTACT: S. Joseph Ward, Public Relations Director, Signet Banking Corporation, 804-771-7210/
 (SBK) CO: Signet Banking Corporation ST: Virginia IN: FIN SU:


DF -- CH008 -- 3095 12/17/91 16:00 EST
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Publication:PR Newswire
Date:Dec 17, 1991
Words:466
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