MNC earnings skyrocket in 2nd quarter Troubled assets reduced 20 percent

July 16, 1993|By Timothy J. Mullaney | Timothy J. Mullaney,Staff Writer

MNC Financial Inc. reported a sharp gain in second-quarter profits yesterday, as the parent of Maryland National Bank whittled down its pile of troubled loans and repossessed real estate by more than 20 percent.

MNC, which is scheduled to merge with Charlotte, N.C.-based NationsBank Corp. in October, said it earned $31.8 million in the three months that ended June 30, far above the $2 million it made in the same period last year.

"The earnings look great, obviously," said Anthony Davis, an analyst who follows MNC for Dean Witter Reynolds Inc. in New York. "What they have been able to pull off is remarkable."

Analysts had expected MNC to earn about 21 cents a share for the quarter, according to Zacks Corporate Earnings Estimator, compared with the 27 cents it reported.

But Mr. Davis, as well as Nancy Bush of Brown Bros. Harriman in New York, said Wall Street would pay little attention to the report because MNC Financial is to be independent for such a short time.

"We don't follow MNC directly, only as it relates to NationsBank," Mr. Davis said.

Yesterday's report showed the banking company made its money on core banking operations, rather than the sale of securities or accounting changes.

MNC spokesman Daniel G. Finney said MNC sold $188 million of nonperforming assets, which include troubled loans and repossessed property, during the quarter, bringing the total of nonperforming assets to $710 million.

The level of troubled assets a year ago was $1.4 billion.

"You have to be impressed with a 21 percent decrease in nonperforming assets" during the past quarter, Mr. Davis said.

MNC's earnings marked a continuing turnaround from the depth of its real estate-related problems when it lost $440 million in 1990 and $70 million in 1991. The company's nonperforming assets ballooned during that time to more than $1.8 billion.

Mr. Finney said the planned merger with NationsBank will be completed after it receives regulatory approvals.

He said the identity of Maryland National Bank would begin to be replaced by NationsBank beginning early next year.

MNC Financial Inc.

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

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

.. .. .. .. .. .. .. ... .. MNC .. .. .. .. .. .. ..14 1/2 .. ..

Period ended

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

Net Income .. .. $31,752.. .. .. ..$1,994 .. .. .. .. +1,492.4%

Primary EPS .. .. $0.27 .. .. .. .. $0.00 .. .. .. .. --

Annualized return

on assets .. .. .. 0.77% .. .. .. .. 0.05% .. .. .. .. --

Add. to allowance

for loan losses .. 15,152 .. .. .. 41,866 .. .. .. .. .. 63.8%

.. .. .. .. .. .. ..6 Mos. .. .. .. Year ago .. .. .. .. Chg.

Net Income .. .. .. $66,901 .. .. .. $3,087 .. .. .. .. +2067.2%

Primary EPS .. .. .. $0.57 .. .. .. $0.00 .. .. .. .. .. .. --

Annualized

return on assets .. .. 0.82% .. .. .. 0.04% .. .. .. .. .. . --

Add. to allowance

for loan losses .. .. $37,701 .. .. $88,287 .. .. .. .. .. -57.3%

.. .. .. .. .. .. .. .. .. .. Balances as of

.. .. .. .. .. .. .. .. 6/30/93 .. .. .. .. .. 6/30/92

Assets .. .. .. .. .. .. $17,122,276 .. .. $16,597,159 .. .. .. +3.2%

Deposits .. .. .. .. .. $10,688,432 .. .. $12,306,329 .. .. .. -13.1%

Loans outst. .. .. .. .. $8,686,933 .. .. ..$9,398,621 .. .. .. ..-7.6%

Loan loss

reserve .. .. .. .. .. .. ..$543,956 .. .. .. ..$685,606 .. .. .. -20.7%

Figures in thousands (except per share data.)

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