Cleveland - Society Corp. expects to realize more than $100 million in annual cost savings from its recent merger with Ameritrust Corp., Society chairman Robert Gillespie said.
At a McDonald & Co. seminar, he said the savings would amount to $8 million to $10 million a month.
He expects earnings to continue rising, he said, and does not expect Society's current strategy for dealing with non-performing assets to require additional charges against earnings.
Society and Ameritrust, two Cleveland-based holding companies, merged in March. Their two lead bank subsidiaries were brought together four months later, enhancing the economies.
Optimism on Profits
Referring to earnings. Mr. Gillespie said Society should continue its history of 10% to 15% annual growth in earnings per share. "Over the next couple of years, we're going to be on the high side" of that range, he said.
The Society chief executive noted that the low range of analyst expectations for Society's earnings is about $5 a share for 1992 and $6.30 in 1993.
Mr. Gillespie acknowledged the difficulty of reducing nonperforming assets, which totaled $626.6 million in the second quarter and $629.6 million in the first quarter.
But he said the loan-loss reserve of $523.1 million at June 30 is adequate to protect earnings even in a worst-case scenario.
Society is studying such strategies as bulk sales of bad assets and auctioning of some real estate holdings, Mr. Gillespie said, but most likely will allow itself 12 to 18 months to work down the nonperformers.
"We will not have to charge earnings to do that," Mr. Gillespie said. "We remain very confident that we will be able to conform [Ameritrust's] portfolio to Society's profile within a reasonable period."
"We are still, as of June 30, in the well-capitalized category for bank holding companies," he added.
Society has been reducing its employment rolls steadily. Mr. Gillespie projected fulltime-equivalent staffing would be about 12,000 at yearend, compared with 12,685 in the second quarter of 1992.
Mr. Gillespie also said Society is likely to raise its dividend this year. Acquisitions remain part of Society's strategy, he said, particularly in-market deals.