ROANOKE TIMES 

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, April 11, 1995                   TAG: 9504110135
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: MAG POFF STAFF WRITER
DATELINE:                                 LENGTH: Medium

BANK EARNS LESS

First Virginia Banks Inc. on Monday reported a 5.6 percent decline in first quarter earnings, blaming the impact of dampened consumer borrowing for homes and cars. The Falls Church-based company is the first of Virginia's major statewide banks to report its financial results for this year's first quarter.

First Virginia, parent of First Virginia Bank-Southwest and Southwest Operations Center Inc. in Roanoke, reported it earned $27.2 million or 80 cents a share for the first quarter, compared to $28.8 million or 89 cents a share during the same quarter last year. The earnings also were off from the $27.8 million earned in the fourth quarter of 1994.

Chairman Barry J. Fitzpatrick said that the "economic consequence of the increase in interest rates has been a reduced rate of growth in the economy."

Higher rates and the slower growth combined to curtail purchases of housing and automobiles, Fitzpatrick said. "As a result," he said, "lending in these two segments is down considerably from the prior year's record volumes."

He noted that the higher interest rates and the lack of growth in the nation's basic money supply also have reduced growth in the bank's deposits and caused greater competition for funds. "This, in turn, led to increased rates and consumer deposits and a weakening of the net interest margin," or the difference between what the bank earns on loans and the amount it pays in interest on deposits.

At the end of March, First Virginia's total loans of $4.925 billion were up 19 percent compared to the same point the prior year, but were down 1 percent from Dec. 31.

The March 1994, numbers, however, do not account for the subsequent purchase of Farmers National Bancorp and FNB Financial Corp., which added 11 percent to the company's assets.

Deposits increased 10 percent over the first quarter of 1994 to $6.76 billion but were down 1 percent compared to deposits on Dec. 31.

Total assets at the end of March totaled $7.86 billion, up 10 percent over the same time a year earlier but down marginally from the end of last year. 


 by CNB