Helped by the sale of its Delaware credit-card operation, MNC Financial Inc., the parent of Maryland National Bank, reported first quarter net income of $154 million, or $1.75 a share.
In 1990, MNC reported first-quarter net income of $6 million, or 5 cents a share.
However, without the one-time gain from the sale of the credit-card division, MNC would have lost about $150 mil
lion, or $1.75 a share.
The credit-card sale amounted to a $444 million pre-tax gain, or about a $300 million after-tax gain, according to a MNC spokesman yesterday.
The credit-card division, now known as MBNA Corp., was sold to the public in January as part of MNC's effort to pay debts and raise capital. The Newark, Del., operation sold for about $1 billion, but part of that amount went back to MBNA to capitalize the new operation.
During the first quarter, MNC continued to be hurt by bad commercial real estate loans and had to provide a $165 million loan-loss provision to cover them. The company took a $31 million loss for future securities sales, a $56 million loss on assets acquired in foreclosure and a $22 million loss associated with the restructuring of its company.
F: Anthony R. Davis, a banking analyst for Wheat First Se
curities, a Richmond-based brokerage firm, said MNC's profit had been expected because of the sale of its credit-card operation. The continuing large provisions for loan losses were also anticipated because of the continuing poor commercial real estate market.
However, Davis did find it encouraging that MNC's non-performing assets decreased by $29 million, or 1.6 percent from the end of last year. Delinquent loans also decreased from $162 million to $94 million during the last three months, he said.
"These are the first indications of improvement in the the credit quality of the loan portfolio," Davis said.
For the rest of the year, Davis expects MNC to break even or be modestly profitable. But he cautioned that it de
See MNC, C11, Col. 4 MNC, From C12 pends on the fortunes of the commercial real estate market.
Peter L. Gartman, executive vice president and chief financial officer of MNC, said in a prepared statement that operating earnings for the company would have been at a break-even level if the large loan-loss provision was excluded along with the special charges.
"MNC's profitability will be largely driven by the stability and prospects for economic improvement in our real estate markets,"
Frank P. Bramble, MNC executive vice president and chief operating officer said. "We have moved aggressively to build capital in our subsidiary banks as well as to build loan-loss reserves. Our efforts are firmly focused on better serving our customers, improving credit quality and returning MNC to sustained profitability."
MNC also said yesterday that it has closed the previously announced sale of its four industrial banks in Colorado to Blazer Financial Corp., a subsidiary of Great Western Fi
HTC nancial Corp. The sale brought $46 million to MNC, which was used for debts and other corporate purposes.
MNC said it has an agreement to sell substantially all the assets of Prime Rate Premium Finance Corp., of Florence, S.C., to Norwest Financial Resources Inc., a subsidiary of Norwest Financial Corp. Inc., which in turn is part of Norwest Corp. Inc. of Minneapolis.
MNC said it will receive about $32 million from the sale, which will be used for general corporate purposes.