Signet's earnings rise 5.9% in quarter Higher fees from loans, deposits led the gain

April 18, 1997|By BLOOMBERG NEWS

RICHMOND, Va. -- Signet Banking Corp. said yesterday that first-quarter earnings rose 5.9 percent, led by increased fees from loans and deposits.

The bank's net income rose to $33.1 million, or 54 cents a share, from $31.2 million, or 52 cents, a year earlier.

The latest results were a penny more than the 53 cents forecast by 12 analysts surveyed by IBES International Inc. Shares of Richmond-based Signet closed up 62.5 cents to $29.50 yesterday.

The results reflect "lower loan losses and continued success in our marketing programs," Signet Chairman and Chief Executive Malcolm McDonald said.

Noninterest income, excluding securities gains, rose 11 percent to $64 million, driven mostly by increases in service charges on loans and deposits, trust and other fees. Operating expenses fell 0.7 percent to $114.8 million.

Net interest income rose 0.8 percent to $117.2 million. Average net loans increased 13 percent to $6.29 billion, though Signet sold $165 million in adjustable-rate mortgages during the

quarter.

Signet also sold $76 million in loans generated by its experimental program of mailing pre-approved checks to potential borrowers. So while its loan portfolio grew, its net interest spread -- the difference between what it paid for deposits and earned from loans -- narrowed to 4.08 percent from 4.32 percent.

In another measure of the portfolio's profitability, its net yield margin narrowed to 4.72 percent from 4.91 percent a year earlier.

The bank, which wants to change itself into a nationwide lender making loans by phone or mail, increased the amount it sets aside for future loans to $16.4 million, up from $11.3 million last year. Credit quality showed signs of improvement, as nonperforming assets fell to $40.7 million from $47.2 million last year.

Pub Date: 4/18/97

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