MNC posts 2nd straight hefty profit Nonperforming assets decline

April 16, 1993|By David Conn | David Conn,Staff Writer

MNC Financial Inc. turned in another strong earnings performance yesterday, reporting a $35 million profit for the first quarter of 1993.

The Baltimore company, the parent of Maryland National Bank and American Security Bank, also said its nonperforming assets fell below $1 billion for the first time since its real estate-related troubles erupted in 1990.

Because of those problems, MNC signed a deal last summer that gave NationsBank Corp. of Charlotte, N.C., the option to buy MNC within five years. NationsBank said in February that it would exercise its option at $15.17 a share, or about $1.36 billion. The acquisition awaits approval of regulators and MNC's shareholders, who will vote at the company's annual meeting June 3.

In what is likely to be one of its last quarters as an independent company, MNC earned $35.1 million, or 30 cents a share. That was far better than the profit of $1.1 million posted in the year-earlier period but was comparable to last year's fourth-quarter earnings of $35.5 million. Included in its profits were $21.2 million from the sale of securities, down from $35.1 million in the first quarter of 1992 but more than 30 percent higher than during the last quarter of 1992.

"Our first-quarter 1993 performance reflects continuing improvement in asset quality and earnings," President and Chief Executive Officer Frank P. Bramble Sr. said in a statement. "Our XTC focus on reduction of our nonperforming assets continues to pay off, with nonperformers now less than half of their previous peak levels."

As of March 31, MNC had $897.6 million in nonperforming assets, down from $1.1 billion in the 1992 fourth quarter and $1.6 billion a year ago.

"It's kind of amazing, if you think that at one point it was as high as $1.9 billion [in 1991]," said Thomas J. Romano, managing director of McConnell, Budd & Downes, a securities firm in Morristown, N.J.

Despite the reductions in nonperforming assets, MNC newly classified $104.5 million in assets as nonperforming during the quarter, the company said. But it received $237.4 million in "solutions" -- either renewed payments from borrowers or the proceeds of asset sales. And MNC charged off or wrote down $78.8 million in assets. The net reduction amounted to $211 million, or 19 percent less than at the end of 1992.

Nonperforming assets amounted to a still high 5.5 percent of MNC's $16.3 billion in assets -- banks try to keep nonperforming assets well below 1 percent of total assets.

The company added $23 million to its reserve for loan losses, down from $31 million the previous quarter and $46 million a year ago.

MNC's stock gained 12.5 cents a share yesterday on the New York Stock Exchange, closing at $14.375, roughly where it has remained since the NationsBank merger was announced in February.

MNC Financial Inc.

. .. .. .. .. .. .. .. .. Ticker .. .. .. .. .. Yesterday's

.. .. .. .. .. .. .. .. ..Symbol .. .. .. .. Cls. .. .. Chg.

.. .. .. .. .. .. .. .. .. MNC .. .. .. .. ..14 3/8 .. .. ..+ 1/8

Period ended. .. .. .. .. 1st qtr. .. .. .. Year ago .. Chg.

March 31

Net Income .. .. .. .. .. ..$35,149 .. .. .. $1,093 .. .. +3,116%

Primary EPS .. .. .. .. .. .. $0.30 .. .. .. .. -- .. .. --

Annualized return

on avg. assets .. .. .. .. .. 0.86% .. .. .. ..0.03% .. .. ..

Add. to allowance

for loan losses .. .. .. .. $22,550 .. .. .. .. $46,420 .. 51.4%

.. .. .. .. .. .. .. .. .. .. .. Balances as of .. .. .. .. .. .. .. .. .. 3/31/93 .. .. .. .. .. 3/31/92

JAssets .. .. .. .. .. .. $16,888,623 .. .. .. .. $16,686,385 .. .. +0.1%

Deposits .. .. .. .. .. $11,222,014 .. .. .. .. $13,465,704 .. .. 16.7%

Loans outst. .. .. .. .. $8,835,811 .. .. .. .. .$9,749,948 .. .. ..9.4%

Loan loss

reserve .. .. .. .. .. .. $555,183 .. .. .. .. ..$742,054 .. .. .. 25.2%

Figures in thousands (except per share data.)

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