Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, April 17, 1991 TAG: 9104170484
SECTION: BUSINESS PAGE: B-7 EDITION: EVENING
SOURCE: Staff reports
DATELINE: LENGTH: Medium
Crestar Financial Corp. reported first-quarter net income of $12 million or 36 cents a share, down 55 percent compared to last year's $27.1 million or 85 cents a share.
Also Signet Banking Corp. reported it earned $6.4 million or 24 cents a share, a 76 percent decline compared to $27.1 million or $1.02 a share a year ago.
Both Richmond-based companies have operations in the Roanoke Valley.
Crestar said earning assets grew 5 percent, primarily in its investment and money market securities portfolios. Average loans, however, declined 2 percent because of the weak economic environment.
Chairman Richard G. Tilghman said that the recession "continues unabated in our markets" and real estate shows no signs of recovery.
As a result, Tilghman said, non-performing assets, those for which the bank earns no income, continued to rise and net charge-offs remained at an above-normal level. He said he expects improvement in the second half of the year.
Non-performing assets rose to $327.1 million, or 4.35 percent of all of Crestar's loans and foreclosed properties, compared to $237.2 million or 3.08 percent at the end of last December.
Provisions set aside for loan losses in the first quarter totaled $37.3 million compared with the $10.9 million taken in the first quarter of 1990. The allowance for loan losses at the end of March was equivalent to 2.23 percent of loans and 51 percent of non-performing assets.
Expenses rose 7 percent, driven by higher FDIC deposit insurance costs, legal fees related to loan workouts and the decline in loan volume. "All of these increases can be traced to the impact of the recession on the banking business," Tilghman said.
Crestar had assets of $11.7 billion at the end of March.
Signet said its assets were only slightly less at $11.6 billion, down 5 percent from a year ago.
Chairman Robert Freeman said the real estate and economic problems that plagued the industry last year continued into the first quarter, resulting in declining real estate values, higher non-performing assets and increased charge-offs.
The company completed its previously-announced sale of a $500 million credit card securitization during the quarter, reduced the dividend and contracted out a large portion of its data processing, which will eliminate 270 bank jobs.
Non-performing assets totaled $328.1 million or 5.19 percent of loans and foreclosed properties, an increase of $57.2 million from the end of the year and $223.5 million from last year's first quarter.
Signet's allowance for loan losses at the end of March amounted to $190.2 million or 3.08 percent of loans, compared to $93.1 million or 1.3 percent a year ago. The allowance represented 98 percent of non-performing loans and 58 percent of non-performing assets.
by CNB