Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, January 18, 1995 TAG: 9501190032
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
NationsBank Corp. said that it had 1994 income of $1.7 billion, a 13 percent increase from $1.5 billion earned in 1993 after a change in accounting for income taxes.
Earnings per share for 1994 rose to $6.12 compared to $5.78 a share the prior year.
Except for the change in accounting, 1993 earnings would have been $1.3 billion or $5 a share for a 31 percent increase in operating income.
For the fourth quarter, income rose 9 percent, to $405 million compared to $373 million for the fourth quarter of 1993. Earnings per share increased 7 percent to $1.46 from $1.37 per share in 1993.
Chairman Hugh McColl called the result significant "given the challenging environment driven by changes in our customers, competitors, regulators, interest rates and the economy."
He said earnings reflect strong loan growth, increased fee income, improved operating efficiency and reductions in credit cost. Credit quality improved, reducing the provisions for loan losses from $430 million in 1993 to $310 million last year.
Last year's results, he said, include the full impact of several acquisitions made in 1993 and the partial impact of acquisitions made during 1994.
Loans grew 20 percent to $95 billion. Excluding acquisitions and sale of bank-card assets, average loans grew 12 percent from 1993, driven by an 18 percent increase in consumer loans. That included residential mortgage and bank card loans. Commercial loans jumped 9 percent.
Average deposits were $93.7 billion vs. $83.5 billion a year ago, primarily reflecting acquisitions.
Total assets were $152 billion.
As expected, Central Fidelity Banks Inc. reported a 17.5 percent decrease in income, falling from $102.9 million in 1993 to $84.86 million in 1994. Income per share declined 18.4 percent from $2.66 to $2.17.
During the fourth quarter, Central Fidelity lost $1.4 million or 4 cents a share vs. a profit of $25.7 million or 66 cents in 1993.
The bank previously had announced that it would restructure its balance sheet, designed to lessen its future exposure to rising interest rates. In the fourth quarter, the company sold about $500 million of fixed-rate securities at a loss of $28.7 million and reinvested in higher-yielding, adjustable rate securities. The company also reduced short-term borrowings.
In addition, the bank had about $7.4 million in one-time charges, including employee relocation costs, real estate costs, franchise tax assessments and other expenses.
Loans grew 19.9 percent to $5.77 billion, with all categories except construction lending recording strong gains. Deposits increased 8.6 percent, mostly in certificates of deposits. Total assets were just over $10 billion.
First Virginia Banks Inc. also reported a drop in income. The bank had income of $113 million or $3.51 a share for 1994, down 2 percent from $116 million or $3.57 a share the prior year.
For the fourth quarter, earnings declined 1 percent to $27.8 million or 88 cents a share from $28.9 million or 89 cents a share a year earlier.
Assets totaled $7.8 billion.
Loans were up 24 percent to $4.99 billion while deposits increased 11 percent to $6.8 billion, due in part to an acquisition completed before year-end. Without the acquisition, the loans would have risen 16 percent and deposits 1 percent.
Chairman Barry Fitzpatrick said loan growth slowed during the second half of the year following record volumes in the first half. Deposit growth was slow all year as rising rates in the Treasury markets resulted in increased competition for funds among banks.
Also as expected, Piedmont BankGroup of Martinsville announced 1994 earnings of $4.1 million or $1.09 a share compared to 1993 income of $6.9 million or $1.86 a share.
Piedmont, like Central Fidelity, restructured its balance sheet, selling fixed-interest holdings at an after-tax charge of about $4 million.
Chairman Michael Brenan said the company also took a charge against earnings to cover its net loan charge-offs during the fourth quarter.
Without these charge-offs, the company would have earned income of $8.3 million. "This base of core earnings is the cornerstone for building future profitability and growth" for the bank, Brenan said.
Piedmont reported year-end assets of $796 million.
by CNB