NCNB reports sharp drop in 4th-quarter earnings BY THE NUMBERS

January 19, 1991|By Peter H. Frank

NCNB Corp., one of the country's largest banking companies, reported sharply lower fourth-quarter earnings yesterday as weakening real estate markets and a deteriorating economy continued their rampage through the banking industry.

For the three months that ended Dec. 31, the Charlotte, N.C.-based company said it earned $31.2 million, or 26 cents a share fully diluted, down from $136.2 million, or $1.25 a share, a year earlier.

NCNB, with $65.3 billion in assets, operates 923 branches in seven states. The company's local banking unit, NCNB National Bank of Maryland, had $334 million in assets at the end of November -- the most current figures available -- and eight branches in and near Baltimore.

"1990 was a difficult, demanding, and disappointing year for NCNB, as it was for most of the banking industry," Hugh McColl, chairman of NCNB, said in a prepared statement. "Higher levels of problem loans and loan losses at NCNB were reflective of weakening real estate markets, tightened regulatory standards

and a slowing U.S. economy."

The lower earnings were attributed primarily to a substantial increase in the amount set aside to cover the costs of bad loans. The company said it added $185.8 million to its allowance for possible loan losses, a 168 percent increase from the $69.2 million set aside during the same period a year earlier.

"We expect 1991 to be another tough year for the banking industry, as we foresee no immediate improvement in real estate markets or in general economic activity," Mr. McColl said. "However, we believe NCNB has the flexibility to deal with the challenges that lie ahead."

Results for last year reflected 100 percent ownership of NCNB Texas, compared with a 20 percent stake in the first quarter of 1989, a 49 percent stake in the second quarter and July, and a 100 percent stake for the remainder of the year.

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