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SOUTHERN NATIONAL REPORTS FIRST QUARTER EARNINGS UP 58 PERCENT

 LUMBERTON, N.C., April 8 /PRNewswire/ -- Southern National Corporation (NYSE: SNB) reported today that earnings for the first quarter were $17.7 million, compared to $11.2 million in the first quarter of 1992, a 58 percent increase. On a per share basis, fully- diluted net income increased 39 percent, rising from $.36 in 1992 to $.50 in 1993.
 On January 29, 1993, Southern National successfully completed its acquisition of FedFirst Bancshares, Inc. The transaction, accounted for as a pooling-of-interests, added $396 million in assets and $339 million in deposits as Southern National improved its Winston-Salem deposit market share ranking to 2nd place. Accordingly, all financial data contained herein has been restated to reflect the impact of FedFirst, unless otherwise indicated.
 FINANCIAL HIGHLIGHTS
 Fully-diluted EPS for the quarter was higher than for any 1992
 quarter
 Key performance ratios
 -- Return on assets was 1.40 percent, compared to 1.00 percent for
 full year 1992
 -- Return on common equity was 18.02 percent, compared to 12.66
 percent for full year 1992
 Net yield on earning assets was 4.75 percent
 -- Compared to 4.89 percent for the full year 1992
 Nonperforming assets at March 31 were $27.2 million
 -- .89 percent of loan-related assets
 -- Declined for the eighth consecutive quarter
 Charge-offs for the quarter were $1.5 million
 -- Compared to 1992 quarterly average of $3.2 million
 -- A .19 percent annualized rate, compared to .45 percent for full
 year 1992
 Allowance for losses at March 31, 1993 was 1.25 percent of loans
 -- Equals 443 percent of nonaccrual loans at quarter-end
 Common stock closed at $21.875 on March 31, compared to:
 -- $19.625 at December 31, 1992
 -- $14.25 at March 31, 1992
 Capital ratios at March 31, 1993
 -- Risk-based Tier 1 capital was approximately 14.3 percent
 -- Risk-based total capital was approximately 15.6 percent
 -- Leverage ratio was 8.5 percent
 -- Equity-to-assets ratio was 8.7 percent
 Additional financial data are contained in accompanying tables.
 "The first quarter at Southern National continued to be very active. We completed the acquisition of FedFirst, the largest transaction in our history, and reached an agreement to acquire East Coast Savings Bank. In addition, we launched initiatives in investment services and mortgage lending," said Chairman Glenn Orr. "Despite these time-consuming endeavors, our earnings growth performance remained strong and asset quality continued to improve."
 The conversion/merger of East Coast, located in Goldsboro, North Carolina, will be accounted for as a purchase. The transaction, expected to be completed during the third quarter of 1993, is subject to approval by regulatory agencies and by East Coast members. East Coast has assets of $252 million.
 During the first quarter, Southern National sold securities with a book value of $269 million, resulting in a net gain of $13.5 million. The primary factors leading to the sale of these securities, which were classified in the held for sale portfolio, were the consideration of new accounting regulations facing the banking industry and anticipated balance sheet changes arising from merger and acquisition activity. The effect of the gains was mitigated by the implementation of the provisions of the accounting pronouncement covering postretirement healthcare benefits which was recorded via a cumulative catch-up adjustment amounting to $6.5 million before taxes. In addition, (i) accelerated depreciation or retirement of certain technology-related equipment totaled $2.6 million; (ii) $1.8 million in losses on foreclosed property was recognized in an effort to accelerate resolution of problem assets; (iii) early buyouts of employment contracts amounted to $300 thousand; and (iv) other accruals and expenses of approximately $2.0 million were recorded. After considering the effect of taxes, the resulting net impact of these items of income and expense was not significant.
 Net yield on earning assets FTE declined 21 basis points from the fourth quarter of 1992 to the first quarter of 1993 because of the impact of the interest rate environment and the timing of the sale of securities and subsequent reinvestment of the proceeds. Repricing of the thrift liabilities in February to conform the rates more closely to those offered by the bank served to improve the net yield as the quarter advanced.
 In the first quarter of 1993, loans grew 14 percent over the same period last year. Excluding the effect of acquisitions accounted for as purchases, this increase was 6 percent. Compared to the fourth quarter of 1992, loan growth was a modest 3 percent annualized. However, as the first quarter progressed, loan demand quickened as evidenced by the 6 percent annualized increase in the period-end balances.
 Southern National operates 158 offices in 84 cities and towns in the Carolinas.
 SOUTHERN NATIONAL CORPORATION
 FINANCIAL SUMMARY
 (Unaudited)
 Three Months Ended Percent
 (Dollars in thousands March 31, Increase
 except per share data) 1993 1992 (Decrease)
 RESULTS OF OPERATIONS
 Interest income:
 Interest and fees on
 loans and leases $ 63,896 $ 63,266 1
 Interest and dividends
 on securities 26,447 24,119 10
 Interest on temporary
 investments 726 1,253 (42)
 Total interest income 91,069 88,638 3
 Interest expense:
 Interest on deposits 33,609 38,310 (12)
 Interest on short-term
 borrowings 2,805 3,531 (21)
 Interest on long-term debt 825 615 34
 Total interest expense 37,239 42,456 (12)
 Net interest income 53,830 46,182 17
 Provision for loan
 and lease losses 1,584 4,193 (62)
 Noninterest income:
 Service charges on
 deposit accounts 6,104 5,915 3
 Nondeposit fees and
 commissions 4,002 3,484 15
 Securities gains, net 13,537 6 NM
 Other income 1,440 1,200 20
 Total noninterest income 25,083 10,605 137
 Noninterest expense:
 Personnel expense 21,918 17,932 22
 Occupancy and
 equipment expense 6,607 4,830 37
 Federal deposit
 insurance expense 2,219 2,002 11
 Other expense 13,799 11,174 23
 Total noninterest expense 44,543 35,938 24
 Provision for income taxes 11,559 5,480 111
 Income before cumulative effect
 of changes in accounting
 principles 21,227 11,176 90
 Less: cumulative effect of changes
 in accounting principles,
 net of income taxes 3,571 - NM
 Net income $ 17,656 $ 11,176 58
 Net income applicable to
 common shares 16,357 10,468 56
 PER SHARE
 Net income
 Primary
 Income before
 cumulative effect 0.65 0.37 76
 Less: cumulative
 effect, net of
 income taxes 0.12 - NM
 Net income $ 0.53 $ 0.37 43
 Fully diluted
 Income before
 cumulative effect 0.60 0.36 67
 Less: cumulative
 effect, net of
 income taxes 0.10 - NM
 Net income $ 0.50 $ 0.36 39
 Weighted average
 shares outstanding
 Primary 30,577,052 28,267,313
 Fully diluted 35,140,649 31,123,964
 Cash dividends $ 0.15 $ 0.12 25 pct.
 PERFORMANCE RATIOS
 Return on average assets 1.40 pct. 1.03 pct.
 Return on average common
 shareholders' equity 18.02 13.85
 Net yield on earning assets
 (fully taxable equivalent) 4.75 4.74
 As of/For the
 Quarter Ended
 (Dollars in thousands
 except per share data) 3/31/1993 12/31/1992 3/31/1992
 ASSET QUALITY RATIOS
 Nonaccrual loans and leases as
 percent of loans and leases 0.28 pct. 0.29 pct. 0.38 pct.
 Nonperforming assets as
 percent of:
 Total assets 0.53 0.59 0.85
 Loans and leases plus
 foreclosed property 0.89 0.99 1.41
 Net charge-offs as percent of
 average loans and leases 0.19 0.41 0.59
 Allowance for losses as percent
 of loans and leases 1.25 1.27 1.27
 Ratio of allowance for losses to:
 Net charge-offs 6.55 x 3.06 x 2.27 x
 Nonaccrual loans and leases 4.43 4.30 3.35
 AVERAGE BALANCES
? Securities $1,624,411 $1,582,743 $1,263,832
 Loans and leases 3,020,820 2,997,763 2,647,180
 Earning assets 4,742,348 4,640,759 4,044,405
 Total assets 5,047,854 4,949,342 4,328,589
 Deposits 4,145,857 4,047,890 3,557,439
 Short-term borrowings 365,750 397,363 362,324
 Interest-bearing liabilities 4,102,948 4,017,226 3,566,807
 Shareholders' equity 437,246 432,762 342,766
 NOTE: All line items referring to loans and leases
 reflect loans and leases, net of unearned income.
 -0- 4/8/93
 /CONTACT: (Media) Bob Denham, 919-671-2427, or (Analysts) John R. Spruill, 919-671-2530, both of Southern National Corporation/
 (SNB)


CO: Southern National Corporation ST: North Carolina IN: FIN SU: ERN

SB -- CH004 -- 4043 04/08/93 07:52 EDT
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