Marine Midland Banks Inc said in afiling with the Securities and Exchange Commission that it may
reclassify as "nonperforming" 359 mln dlrs of medium- and
long-term loans to Brazil.
    The company added that it expects first quarter 1987
earnings to be "down moderately" from year-earlier levels.
    "Continued suspension of interest payments on the medium-
and long-term debt could result in such loans being classified
as nonperforming and placed on nonaccrual," it said.
    However, it added its belief that it was "premature to
decide at this time" whether to reclassify the loans.
    Brazil announced Feb. 20 that it was temporarily suspending
interest payments on all its medium- and long-term foreign bank
debt.
    Marine Midland said its total Brazil outstandings as of the
end of 1986 were 653 mln dlrs, including 359 mln dlrs of
medium- and long-term loans and 294 mln dlrs of short-term
outstandings.
    As of Dec. 31, it had interest receivable of about five mln
dlrs on its medium- and long-term Brazil outstandings.
    If debt restructuring talks between Brazil and its creditor
banks are not completed by the end of the third quarter, the
company estimated Brazil's action would reduce its net income
for the year by about 22 mln dlrs.
    In the first quarter of 1986, Marine Midland reported 
record earnings of 38.2 mln dlrs, bolstered by certain
non-recurring securities gains.
    It said it expected lower first quarter 1987 earnings
because the money market cost of funds had increased, "narrowing
net interest spreads somewhat." It said the earnings projection
was based on "preliminary" 1987 data.
 Reuter
