Signet's earnings double despite loan problems

October 17, 1991|By Peter H. Frank gbB

Signet Banking Corp. said yesterday that its earnings more than doubled during the third quarter, compared with a year ago. Signet said additional income from fees and investments overcame lingering problems in the real estate market.

The Richmond, Va.-based company, which owns Signet Bank/Maryland, said that it earned $11.2 million, or 41 cents a share, in the three months that ended Sept. 30, compared with earnings of $4.5 million, or 17 cents a share, in the corresponding part of last year.

"Signet continues to experience low levels of earnings due to the overbuilding in office space and retail shopping facilities, as well as the national recession," Robert M. Freeman, Signet's chairman and chief executive, said in a statement.

The banking company, which has 244 offices in Virginia, Maryland and Washington, said that its troubled assets -- made up mostly of real estate loans -- increased $17 million, to $348.9 million, or about 5.8 percent of loans, during the quarter.

While the level represented a significant increase over the 3.1 percent reported a year ago, much of that jump resulted from a 15 percent decline in loans during the past 12 months. Stricter lending requirements and lower consumer demand have resulted in a dramatic drop in outstanding loans compared with a year ago. At the end of September, the company had $5.9 billion in loans outstanding, of which nearly 17 percent were to the riskier real estate construction industry.

As the income from loans has dropped, many of the area's banks have attempted to replace it with increased fees and investment gains.

Signet said that while its interest income fell 27 percent from a year earlier, income from service charges, securities gains and other non-interest items rose 53 percent, to $75 million, during the quarter.

Three months ended 9/30/91

... Income ... ... ... ... ... ... Share

'91 11,177,000 .. ... ... ... ... 0.41

'90 4,505,000 .. ... ... ... ... 0.17

% change +148.1 .. ... ... ... ... +141.2

... Assets ... ... ... ... ... ... Deposits

'91 11,546,424,000 .. ... ... ... 8,533,145,000

'90 11,695,774,000 .. ... ... ... 8,094,348,000

% change -1.3 .. ... ... ... .. .. +5.4

pTC Nine months ended 9/30/91

... Income ... ... ... ... ... ... Share

'91 25,945,000 .. ... ... ... ... 0.96

'90 34,558,000 .. ... ... ... ... 1.30

% change -24.9 ... ... ... ... ... -26.2

Portfolio (three months ended 9/30/91)

Loans outstanding ... ... ... ... ... ... Net charge-offs*

'91 5,890,448,000 .. ... ... ... ... ... 87,400,000

'90 6,914,493,000 .. ... ... ... ... ... 73,500,000

% change -14.8 ... ... ... ... ... ... ... +18.9

Addition to allowance ... ... ... ... ... ... Allowance

for loan losses ... ... ... ... ... ... .. .. for loan losses

'91 30,052,000 ... ... ... ... ... ... .. .. 185,978,000

'90 57,141,000 ... ... ... ... ... ... .. .. 144,732,000

% change -47.4 ... ... ... ... ... .. ... ... +28.5

* Figures are for nine months ended Sept. 30.

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