THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, January 25, 1995 TAG: 9501250442
SECTION: BUSINESS PAGE: D3 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Medium: 55 lines
Signet Banking Corp., whose credit-card operation became a stand-alone company last November, said Tuesday that its fourth-quarter net income fell 14 percent because of pre-tax restructuring charges totaling $9.6 million.
However, results for the latest quarter and for 1994 were marked by robust loan growth to commercial borrowers and consumers, said Robert M. Freeman, chairman and chief executive officer of the Richmond-based banking company.
``We've had some very encouraging success in our student loans, and we've seen some increase in equity lines of credit,'' Freeman said.
Signet said it earned $42.9 million, or 73 cents a share, for the three months ended Dec. 31. That was down from net income of $49.9 million, or 85 cents a share, for the fourth quarter of 1993.
For the full year, Signet reported a 14 percent decline in net income, which it attributed to $92.2 million of pre-tax charges for restructuring operations and terminating contracts for data-processing and other services.
Wallace B. Millner III, Signet chief financial officer, said the restructuring charges included severance payments for displaced employees, the cost of an early-retirement program for 230 employees, and consolidation of several of the company's operations.
Signet's 1994 net income totaled $149.8 million, down from $174.41 million in 1993. Per-share earnings were $2.59, compared with $3.06.
The company said its 1994 net interest income and income from fees and other noninterest sources climbed 23 percent to $894.8 million.
Results for the fourth quarter and the year also included Signet's 88.5 percent stake in Capital One Financial Corp., the credit-card subsidiary that was established as an independent company last fall.
Signet said it will complete the spinoff of Falls Church-based Capital One on Feb. 28. Signet stockholders will receive one share of Capital One for each Signet share they own on Feb. 10, the banking company said.
Signet also said it will pay a regular quarterly dividend of 25 cents per share on Feb. 23 to shareholders of record Feb. 10.
Separately, Capital One reported that its net income slumped 35 percent for the fourth quarter and 14 percent for the full year, partly because of restructuring charges.
For the October-through-December period, its net income totaled $26.5 million, which was down from $40.6 million in the year-earlier quarter.
Per-share earnings for the fourth quarter dropped to 40 cents from 61 cents.
Capital One said it earned $95.3 million, or $1.44 a share, in 1994. That compared with $110.5 million, or $1.67 a share, in 1993.
Its results for the full year included an after-tax charge of $31.9 million, or 48 cents a share, for the termination of certain contracts and restructuring costs, the credit-card company said. by CNB