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U.S. BANCORP ANNOUNCES THIRD-QUARTER 1992 RESULTS

 U.S. BANCORP ANNOUNCES THIRD-QUARTER 1992 RESULTS
 PORTLAND, Ore., Oct. 13 /PRNewswire/ -- U.S. Bancorp (NASDAQ: USBC)


today reported net income of $41.6 million for the third quarter 1992, down 19 percent from the $51.4 million earned in the third quarter 1991. The decline was due to several actions taken during the quarter to strengthen the balance sheet and ensure a continued role as the strongest regional banking company headquartered in the Northwest.
 Net income for the first nine months of 1992 totaled $142.0 million, down slightly from the $142.9 million earned during the same period of 1991, and equated to a return on average assets of 1.00 percent and a return on average equity of 12.65 percent.
 Earnings per common share were 40 cents for the quarter, versus 53 cents reported in the same period last year and were $1.42 for the first nine months of 1992, versus $1.47 earned in the same period of 1991.
 Actions taken during the third quarter 1992 included:
 - Disposition of $70 million of nonperforming highly leveraged transaction loans at a pre-tax cost of approximately $20 million.
 - Sale of $190 million of low yielding employee mortgage loans at a pre-tax cost of $3.5 million.
 - Completion of the merger of 20 divested branches of Bank of America and Security Pacific with U.S. Bank of California.
 - Establishment of U.S. Bank of Nevada through the purchase of 30 former Bank of America Nevada and Security Pacific branches.
 - Issuance of Series A Preferred Stock to complement the company's already strong common equity base and allow for the expansion in northern California and Nevada.
 - Completion of relocation to the company's Operations Center, a new state-of-the-art facility which will provide new levels of efficiency and productivity.
 Higher levels of earning assets were more than enough to offset a slight reduction in the net interest margin to 5.14 percent, allowing net interest income on a tax equivalent basis to expand 3 percent over the prior quarter to $225.5 million.
 Net losses on the sale of commercial and other loans resulted in a 9-percent decrease to $99.9 million in total noninterest revenues in comparison to the prior quarter. Noninterest revenues for the quarter are up 4 percent over third quarter 1991. Total noninterest expenses were up only 1 percent over the second quarter 1992, totaling $211.3 million.
 The economic environment in the markets served by U.S. Bancorp showed a continuation of trends established earlier in the year. Nevada, Oregon, Washington and Idaho continued to show modest gains in employment over the prior year while northern California saw a slight decline. The economic activity in the company's markets is expected to remain slow until the national picture begins to brighten.
 "Consistent with our policy of management decisions based on a long- range focus, and recognizing that recovery in the national economy appears to be some time off yet, we implemented a strategy to significantly reduce our level of nonperforming assets," said Roger L. Breezley, chairman and chief executive officer.
 The strategy, to dispose of all major nonperforming assets (NPA's) located outside the primary U.S. Bancorp market place, was successful as the liquidation of $70 million in national, out-of-market credits brought a 21-percent reduction in total NPA's to $336 million at quarter end, down from a peak of $425 million in July. The ratio of NPA's to loans and other real estate declined to 2.41 percent from 2.83 percent at June 30, representing the lowest level in six quarters. A further decline is expected in the fourth quarter. Total reserves were increased to $253 million, or 1.83 percent of loans, up from $244 million or 1.78 percent of loans in the prior quarter.
 The lowest interest rate environment in many years made it prudent to sell $190 million of long term fixed rate employee mortgage loans that had been originated at discounts to market rates. The cost associated with this transaction was approximately $3.5 million on a pre-tax basis.
 U.S. Bank of California grew by 20 locations with the acquisition of divested branches from BankAmerica Corp. This transaction boosted U.S. Bank's presence in northern California to 60 branches and $1.7 billion in assets. Results of these new operations are included from the date of purchase, Aug. 27, 1992.
 U.S. Bank of Nevada was established late in the quarter as the third-largest full-service commercial bank in Nevada with 30 branches and $918 million in assets. Costs associated with the acquisition of the branches in California and Nevada approximated $2 million during the quarter.
 Several operational activities were relocated to a new facility during the quarter at a cost of approximately $2 million. Operations had been housed in more expensive downtown office space for the last 20 years. The new operations center will provide needed space to accommodate the expanding activities.
 "This activity certainly involved significant cost," stated Breezley, "However, we strongly believe that this investment today will provide for excellent returns in the future. U.S. Bancorp is now positioned throughout our primary markets to provide the finest in customer value and service. With an extremely strong balance sheet and capital position, we are poised for completion of a successful 1992 and are excited over the prospects for 1993."
 U.S. Bancorp is the largest financial services company headquartered in the Pacific Northwest, with assets of $21.1 billion at Sept. 30, 1992. Subsidiaries include U.S. Bank of Oregon, U.S. Bank of Washington, U.S. Bank of California, U.S. Bank of Nevada and U.S. Bank of Idaho. Other financial services businesses include U.S. Bancorp Capital Markets, U.S. Bancorp Mortgage Co., U.S. Bancorp Investor Services, U.S. Bancorp Leasing & Financial, U.S. Bancorp Financial Inc. and U.S. Bancorp National Businesses.
 U.S. BANCORP AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEET
 (In thousands)
 Sept. 30, 1992 1991
 ASSETS
 Interest earning assets:
 Money market investments:
 Time deposits with other banks $ 12,987 $ 25,526
 Federal funds sold and security
 resell agreements 432,454 421,203
 Other money market investments 16,831 29,978
 Total money market investments 462,272 476,707
 Investment securities 3,173,936 1,473,875
 Trading account securities 174,530 260,163
 Loans held for sale 886,486 258,674
 Loans (net of unearned income):
 Commercial 6,472,902 6,698,903
 Real estate construction 881,173 887,258
 Real estate mortgage 2,688,888 2,884,262
 Consumer 2,972,031 2,655,374
 Foreign 51,731 49,394
 Lease financing 768,246 827,722
 Total loans 13,834,971 14,002,913
 Total interest earning assets 18,532,195 16,472,332
 Allowance for loan losses (252,710) (226,943)
 Cash and due from banks 1,267,144 1,066,440
 Premises, furniture and equipment 462,597 367,994
 Other real estate and equipment owned 74,366 107,405
 Customers' liability on acceptances 230,989 202,039
 Other assets 736,460 651,731
 Total $21,051,041 $18,640,998
 LIABILITIES
 Interest bearing liabilities:
 Deposits $11,955,789 $10,740,004
 Federal funds purchased and security
 repurchase agreements 1,825,697 1,696,738
 Commercial paper 236,294 218,124
 Other short-term borrowings 269,011 399,928
 Long-term debt 1,298,501 1,199,806
 Total interest bearing liabilities 15,585,292 14,254,600
 Noninterest bearing deposits 3,260,281 2,506,092
 Accrued income taxes 88,001 71,396
 Acceptances outstanding 230,989 202,039
 Other liabilities 235,809 231,842
 Total liabilities 19,400,372 17,265,969
 SHAREHOLDERS' EQUITY
 Preferred stock 150,000 --
 Common stock 493,921 490,234
 Capital surplus 376,532 374,486
 Retained earnings 630,216 510,309
 Total shareholders' equity 1,650,669 1,375,029
 Total $21,051,041 $18,640,998
 U.S. BANCORP AND SUBSIDIARIES
 CONSOLIDATED STATEMENT OF INCOME
 (In thousands, except per-share data)
 Three Months Nine Months
 Ended Sept. 30: 1992 1991 1992 1991
 INTEREST INCOME
 Loans, including fees $308,558 $359,472 $ 947,383 $1,093,338
 Loans held for sale 11,254 6,113 33,009 16,515
 Investment securities
 U.S. Treasury obligations 8,440 3,835 21,606 11,068
 State and municipal bonds 5,885 5,849 16,811 19,028
 U.S. government agency
 and other securities 28,651 21,033 75,461 70,044
 Trading account securities 2,874 3,305 6,550 10,232
 Money market investments 3,434 7,562 11,990 25,699
 Total interest income 369,096 407,169 1,112,810 1,245,924
 INTEREST EXPENSE
 Deposits 107,459 154,436 342,296 481,917
 Short-term borrowings 19,270 33,485 71,225 126,399
 Long-term debt 25,457 24,966 70,789 63,001
 Total interest expense 152,186 212,887 484,310 671,317
 NET INTEREST INCOME 216,910 194,282 628,500 574,607
 Provision for loan losses 48,458 34,763 113,421 96,352
 Net interest income after
 provision for loan
 losses 168,452 159,519 515,079 478,255
 NONINTEREST REVENUE
 Service charges on deposit
 accounts 30,551 25,837 86,490 77,935
 Trust and investment
 administration 11,018 9,528 33,407 29,947
 Bank card revenue 13,119 10,556 35,559 27,438
 Credit reporting revenue 9,526 3,883 25,878 16,474
 Equity investment income 670 6,809 7,576 8,138
 Exchange fees 5,933 6,177 16,660 15,099
 Loss/Gain on commercial
 and other loan sales (9,290) -- 986 --
 Mortgage banking income 14,182 11,915 51,360 35,332
 Securities transactions 830 3,522 1,137 4,465
 Other operating revenue 23,351 17,714 63,046 49,937
 Total noninterest revenue 99,890 95,941 322,099 264,765
 U. S. BANCORP AND SUBSIDIARIES
 CONSOLIDATED STATEMENT OF INCOME (Continued)
 (In thousands except per-share data)
 Three Months Nine Months
 Ended Sept. 30: 1992 1991 1992 1991
 NONINTEREST EXPENSE
 Employee compensation and
 benefits 105,960 96,890 320,816 284,568
 Net occupancy expense 14,173 12,550 40,841 37,074
 Equipment rentals,
 depreciation and
 maintenance 18,716 15,987 53,027 45,507
 FDIC assessment 7,840 7,256 22,640 19,983
 Long-term debt redemption
 expense -- -- 6,668 --
 Other real estate owned
 operating expenses 6,495 3,082 19,811 6,628
 Telecommunications 6,287 4,776 17,723 13,688
 Other operating expense 51,820 43,145 154,583 132,206
 Total noninterest
 expense 211,291 183,686 636,109 539,654
 Income before income
 taxes 57,051 71,774 201,069 203,366
 Provision for income
 taxes 15,411 20,362 59,072 60,456
 Net income $ 41,640 $ 51,412 $ 141,997 $ 142,910
 Net income applicable
 to common stock $ 39,338 $ 51,412 $ 139,695 $ 142,910
 EARNINGS PER COMMON SHARE
 AND TAX-EQUIVALENT NET
 INTEREST MARGIN
 Average number of common
 shares outstanding 98,751 97,992 98,567 97,473
 Earnings per common
 share $ 0.40 $ 0.53 $ 1.42 $ 1.47
 Average rate earned on
 interest earning
 assets (percents) 8.61 10.19 8.98 10.35
 Cost of funds supporting
 earning assets (percents) 3.47 5.17 3.82 5.43
 Net interest margin
 (percents) 5.14 5.02 5.16 4.92
 Three Months Nine Months
 Ended Sept. 30: 1992 1991 1992 1991
 (In thousands except per share data)
 Average common shares
 outstanding 98,751 97,992 98,567 97,473
 Earnings per common
 share $ 0.40 $ 0.53 $ 1.42 $ 1.47
 Book value per common
 share $ 15.19 $ 14.02
 Risk-based capital
 (1992 estimate)
 Tier 1 (percents) 8.52 7.39
 Total capital (percents) 11.49 10.28
 TAX-EQUIVALENT NET INTEREST MARGIN
 Average rate earned on
 interest earning
 assets (percents) 8.61 10.19 8.98 10.35
 Cost of funds supporting
 earning assets (percents) 3.47 5.17 3.82 5.43
 Net interest margin
 (percents) 5.14 5.02 5.16 4.92
 Tax-equivalent
 adjustment $ 8,541 $ 11,766 $ 27,855 $ 35,542
 Net interest income-fully
 taxable $225,451 $206,048 $ 656,355 $ 610,149
 (In millions)
 Average loans $ 13,806 $ 13,878 $ 13,753 $ 13,960
 Average earning assets 17,494 16,348 16,948 16,535
 Average assets 19,688 18,329 19,055 18,474
 Average deposits 13,920 13,058 13,484 13,023
 Average total shareholders'
 equity 1,616 1,359 1,499 1,325
 Allowance for loan losses,
 beginning of period $244,395 $216,070 $ 230,101 $ 202,787
 Acquisitions 7,523 1,853 7,523 2,945
 Provision for loan losses 48,458 34,763 113,421 96,352
 Loans charged off (54,758) (31,120) (118,889) (93,167)
 Recovery of loans previously
 charged off 7,092 5,377 20,554 18,026
 Net loan charge-offs (47,666) (25,743) (98,335) (75,141)
 Allowance for loan losses,
 end of period $252,710 $226,943 $ 252,710 $ 226,943
 Nonaccrual loans $ 255,514 $ 269,175
 Restructured loans 5,924 5,267
 Other real estate and
 equipment owned 74,366 107,405
 Total nonperforming assets $ 335,804 $ 381,847
 Accruing loans past due
 90 days or more $ 19,682 $ 32,492
 Ratios:
 Net loan charge-offs to
 average loans(A)
 (percents) 1.37 0.74 0.96 0.72
 Allowance for loan losses
 to end of period loans
 (percents) 1.83 1.62
 Total nonperforming assets
 as a percent of outstanding
 loans and other real estate
 and equipment owned
 (percents) 2.41 2.71
 (A)Net loan charge-offs were
 annualized
 -0- 10/13/92
 /CONTACT: Donald F. Bowler, senior vice president, Investor Relations, 503-275-5702, or Mark R. Patterson, assistant vice president, Investor Relations, 503-275-6524, both of U.S. Bancorp/
 (USBC) CO: U.S. Bancorp ST: Oregon IN: FIN SU: ERN


SC -- SE006 -- 9101 10/13/92 07:53 EDT
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Date:Oct 13, 1992
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