Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, July 14, 1990 TAG: 9007140085
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: MAG POFF BUSINESS WRITER
DATELINE: LENGTH: Medium
Central Fidelity Bank, which has yet to undergo a tighter federal audit, reported increased earnings.
Signet Banking Corp. said its earnings fell 90.7 percent for the quarter because of a higher loan loss reserve and the costs of an expanded credit card program. As it announced last week, Signet increased its provision for loan losses following an examination of its real estate portfolio by federal auditors.
Signet increased its reserve by $44.2 million for the quarter to $120 million, or 1.61 percent of loans. This reduced quarterly earnings to $2.9 million, or 11 cents a share.
Chairman Robert M. Freeman said the amount of the loan loss reserve exceeded the requirement of federal examiners. He said Signet took the action because of continued softening of the real estate market with deterioration of underlying collateral values and asset quality.
Signet had an expense of 18 cents a share in the quarter because of a solicitation program for expansion of its credit card program.
Earnings during the corresponding quarter last year were $31.3 million.
For the first six months, Signet's earnings fell by 52.2 percent from $62.8 million, or $2.29 a share, to $30 million, or $1.13 cents a share. The 1989 results, however, reflected a $2.3 million sale of branch offices.
Crestar Financial Corp. reported income of $9 million, or 26 cents a share, compared with $25.4 million, or 81 cents, last year.
Crestar increased its loan loss reserve by $25 million, the equivalent of 53 cents a share, "in recognition of a deterioration in current credit conditions," the company said. The allowance at the end of the quarter was $121.6 million, or 1.55 percent of loans, an increase of $40.2 million.
For the half year, Crestar had income of $36.1 million, or $1.11 a share, versus $49.8 million, or $1.59 a share, a year earlier.
Sovran said it expects to increase its reserve by $74 million to $265 million, or 1.5 percent of total loans. The bank said it expects next week to report per-share net income of 35 to 37 cents for the quarter, about a third of the prior period's income, and $1.46-$1.48 for the half.
Sovran said it plans to reduce its credit exposure in Third World nations by disposing of all of its $60 million in problem credits. That move accounts for $28 million of the loan loss provision.
Nonperforming assets are expected to increase $120 million to $250 million. Of this amount, $39 million are loans that are considered current.
Central Fidelity reported income of $14 million, or 93 cents a share, up 4.6 percent from the first quarter last year.
For the first half, the bank earned $28.2 million, or $1.84 cents a share, an increase of 6.6 percent.
by CNB