Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, January 13, 1995 TAG: 9501130074
SECTION: BUSINESS PAGE: A5 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
First Union Corp., Charlotte, N.C.-based parent of First Union National Bank of Virginia in Roanoke, said it earned a record $859million or $4.98 a share last year. In the fourth quarter, First Union earned $183million or $1.04 a share.
Both figures include the previously announced redemption of the corporation's preferred stock. Had it not been for that special one-time charge, the company would have earned $900 million or $5.22 a share, a 14 percent increase from the prior year's figures of $793 million or $4.73 a share.
``We are proud of this record performance,'' said First Union Chairman Edward Crutchfield, ``and we are pleased to demonstrate our ability to increase earnings, even during a year of rapidly rising interest rates.''
He said the company has enhanced its prospects for this year through investments designed to expand the fundamental banking business and to develop new areas for growth, such as capital markets and card products.
The bank said three key factors played a role in 1994's record earnings.
One was a 9 percent increase in net interest income, the difference between the interest the bank pays on deposits and the interest it earns on loans and investments. It reached a record $3.1billion, the 21st consecutive quarterly increase.
The second was a 15 percent growth in loans, up $7.2 billion since the end of 1993. Loans rose by 5 percent or $2.4billion during the fourth quarter.
Finally, the bank experienced continued improvement in credit quality. This included a $358 million decrease in nonperforming assets since the end of 1993 to $558 million. Net charge-offs remained low in 1994 at 0.33 percent of average net loans.
First Union had net loans of $54 billion at the end of the year. The bank said commercial-loan growth was strong throughout its system but especially in Florida, North Carolina and Virginia. Consumer-loan growth was led by direct loans through branches and credit cards.
Deposits stood at $59 billion at the end of the year, an increase of 10 percent from the end of 1993, primarily reflecting acquisitions during that period.
First Union had assets at the year's end of $77.3 billion.
\ Crestar Financial Corp., Richmond parent of Crestar Bank, had record income of $169.1 million or $4.47 a share, compared with 1993 figures of $140.5 million or $3.68 a share.
Income for the fourth quarter totaled $42.4 million or $1.13 a share, compared with $38.7 million or $1.01 a share in the fourth quarter of 1993.
Chairman Richard Tilghman said the results were ``despite the earnings pressures on the banking industry brought about by a rapidly rising interest-rate environment.'' He also noted that the results included successful integration of seven thrifts the bank acquired during the year.
Interest income was up 10 percent to $581.8 million, driven primarily by growth in credit-card, mortgage and installment lending. Loans at the end of the year were $9.3 billion, up 27 percent from the end of 1993.
During the fourth quarter, Crestar recorded securities losses of $9 million from the sale of $313 million of U.S. Treasuries with an average yield of 4.54 percent. The sale is expected to alleviate some of the pressure on net interest income from rising interest rates.
Nonperforming assets were down slightly, the bank said, noting its seven acquisitions during the year added $34 million in nonperforming assets to its portfolio.
Crestar had year-end assets of $14 billion and total deposits of $10.9 billion.
\ National Commerce Bancorp of Memphis, Tenn., which operates NBC Bank at Kroger supermarkets, reported year-end income of $44.3 million, an increase of 12.5 percent from $39.4 million the prior year. Earnings per share were $1.77 compared with $1.58 a year ago.
Fourth quarter income was $12.1 million, an increase of 11.9 percent from nearly $10.9 million a year earlier.
Chairman Thomas Garrott attributed the performance to improved loan quality, a 15.9 percent increase in lending from 1993 and continued geographical expansion. The company opened 10 new branches last year in Kroger and Wal-Mart stores in Tennessee, Virginia and North Carolina.
National Commerce topped $3 billion in assets for the first time.
by CNB