Signet earnings surged by 51.4% in second quarter

July 14, 1993|By Ross Hetrick | Ross Hetrick,Staff Writer

Signet Banking Corp., a Richmond-based bank holding company with a major unit in Maryland, said yesterday that its second-quarter earnings jumped 51.4 percent on the strength of more interest income, a fatter credit card portfolio and fewer bad loans.

Net interest income jumped 22 percent, to $23.7 million, primarily because of the "robust growth in credit card loans," according to a company statement.

Signet's credit card portfolio more than doubled in the past year, growing by $1.8 billion as the bank has pursued an aggressive credit-card promotional effort since September.

"Our principal strategy is to offer a low introductory rate," said Wallace B. Millner, Signet's senior executive vice president and chief financial officer. The offering interest rate, he said, begins at about 9.9 percent and lasts about 12 to 14 months before reverting to a rate of between 12.9 percent and 13.9 percent.

The banking company, which owns Signet Bank/Maryland, was also helped by lower interest rates, which have helped many banks as rates have fallen faster for depositors than for borrowers. As a result, Signet and other banks are enjoying a wider yield margin between what they pay depositors for their money and what they collect from borrowers for loans.

In the second quarter, the gap at Signet widened to 5.03 percent, from 4.33 percent a year ago.

The quality of the loans on the books at Signet also improved during the quarter compared with a year ago. Provisions for possible loan losses dropped 37.7 percent, to $9 million, compared with a year ago.

"Our quality has improved dramatically over the last year," Mr. Millner said. He attributed this to a decision to segregate $850 million of troubled real estate loans.

Signet is a $12 billion company, with 237 full-service bankinoffices in Virginia, Maryland and Washington.

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

Banking Corp... .. .. .. .. Symbol .. .. .. .. .. Cls. .. .. Chg.

.. .. .. .. .. .. .. .. .. ..SBK .. .. .. .. .. ..58 1/2 .. .. .. -1

Period ended

June 30 .. .. .. .. .. .. 2nd qtr. .. .. .. .. .. Year ago .. Chg.

Net Income .. .. .. .. .. $40,440 .. .. .. .. .. $ 26,710 .. +51.4%

Primary EPS .. .. .. .. .. $1.42 .. .. .. .. .. .. ..$0.96 .. +47.9%

Annualized return

on assets .. .. .. .. .. .. 1.39 .. .. .. .. .. .. .. 0.95 .. .. --

Add. to allowance

for loan losses .. .. .. .. $9,011 .. .. .. .. .. $14,458 .. .. -37.7%

.. .. .. .. .. .. .. .. .. .. 6 mos. .. .. .. .. .. Year ago .. .. Chg.

Net Income .. .. .. .. .. .. $78,707 .. .. .. .. .. $48,767 .. .. +61.4%

Primary EPS .. .. .. .. .. .. $2.77 .. .. .. .. .. .. $1.77 .. .. +56.5%

Annualized

return on assets .. .. .. .. ..1.39 .. .. .. .. .. .. 0.86 .. .. .. .. --

Add. to allowance

for loan losses .. .. .. .. $24,509 .. .. .. .. .. .. $39,418 .. .. 37.8%

.. .. .. .. .. .. .. .. .. .. .. .. Balances as of .. .. .. .. .. .. .. .. .. 6/30/93 .. .. .. .. .. .. 6/30/93

LAssets .. .. .. .. .. .. .. $12,044,138 .. .. .. .. $11,218,440 .. ..+7.4% Deposits.. .. .. .. .. .. .. $7,827,717.. .. .. .. ..$7,970,200 .. ..-1.8% Loans outst .. .. .. .. .. ..$5,823,540 .. .. .. .. $5,467,073 .. .. +6.5%

Loan loss

reserve .. .. .. .. .. .. .. .. $258,571 .. .. .. .. .. $300,824 .. ..-14.0%

Figures in thousands (except per share data.)

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.