Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, July 16, 1993 TAG: 9307160123
SECTION: BUSINESS PAGE: B5 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
The company, which earlier this year acquired Dominion Bankshares Corp. and has its regional headquarters in Roanoke, said it earned $1.32 a share in the April-June quarter.
That compares with $123 million, or 79 cents per share, in the 1992 period and with $193 million, or $1.17, in the first quarter.
For the first half, First Union had income of $414 million, or $2.49 a share, compared with last year's $188 million, or $1.22 a share - a gain of 120 percent.
Chairman Edward E. Crutchfield Jr. said the quarter was one of "intense effort" for First Union as it merged with Georgia Federal Bank and First American Metro Corp. of McLean.
During this year's first quarter, it acquired Dominion Bankshares Corp., South Carolina Federal Corp. and DFSoutheastern Inc. of Georgia.
"Our high level of profitability during this period . . . in part reflects the success of our recent acquisitions and our overall strategic focus," Crutchfield said.
First Union's chief financial officer, Bob Atwood, said in a telephone news conference the key factors in the record profits included a 12 percent increase in interest income, gains in the company's merchant banking business, a decline in credit costs and cost controls.
The company expects to save $105 million this year, plus $130 million in 1994, from staff reductions, branch closings and reduced "back office" support costs from the five mergers, he said.
And Atwood cited the efficiencies of a new computer system linking its branches. He said it is the most advanced banking software system in the industry.
First Union, he said, is "well positioned for further growth."
The company also has made significant progress on improving its loan quality, said Mal Murray, chief credit officer. Some formerly bad loans are again performing, meaning they are being repaid and earning interest income for the bank, he said. First Union is getting better-than-expected prices on sales of properties it had acquired from foreclosures, especially those in Florida and Georgia.
Demand for new loans is not robust, but it is rising, he said, especially in North Carolina and Florida.
First Union said loans rose from $40.2 billion to $44.9 billion because of two acquisitions during the quarter; the bank also cited growth in commercial, installment and second mortgage loans.
Acquisitions also accounted for much of the 15 percent increase in deposits, from $47.3 billion to $55.4 billion.
Murray said merchant banking, designed to help small companies start and grow through loans, services and equity investments, showed gains of $44 million, or 16 cents a share.
He said that new line of business is maturing for First Union and should contribute revenue in many subsequent quarters.
First Union had assets of $71.9 billion on June 30. It operates 1,434 offices from Maryland to Florida, plus 232 nonbanking offices in 36 states.
by CNB