$207 Million Loss at First Interstate
Restructuring, Nonperformers Cited
LOS ANGELES -- First Interstate Bancorp. on Friday reported a $207.5 million loss for the third quarter.
The loss, which was expected, stemmed partly from a $90 million restructuring charge.
First Interstate said in September that it planned to lay off about 10% of its 33,500 employees and hoped to cut expenses by $250 million a year.
In addition First Interstate, like other California banks, has been suffering increases in problem loans.
Soured Assets Rise
First Interstate's nonperforming assets totaled $1.98 billion, up 12% from the June 30 level of $1.77 billion and up 5% from the year-earlier $1.85 billion.
Soured assets total 4.05% of assets currently, compared with 3.53% for the prior quarter, and 3.50% a year earlier.
"The rise in nonperforming assets was about the same as other California banks," said Campbell Chaney, an analyst at Sutro & Co.
About 76% of First Interstate's problem loans are real estate related.
Part of First Interstate's loss also stemmed from the big provision for loan losses.
First Interstate set aside $246 million in provisions for credit losses, 70% more than the $146.5 million in the year-ago quarter.
The company's net chargeoffs amounted to $142.8 million, down 32% from the year-ago $208.3 million.
The big provisions boosted First Interstate's reserve for loan losses to $1.243 billion or 4.26% of loans, up 10% from the $1.122 billion or 3.74% a year earlier.
The $207.5 million loss totals $3.46 a share and compares with profits in the year-ago third quarter of $155.4 million or $2.39 a share.
The 1990 results include a $55.7 million after-tax gain on the sale of NOVA Financial Services.