THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, January 13, 1995 TAG: 9501130503
SECTION: BUSINESS PAGE: D3 EDITION: FINAL
SOURCE: By TOM SHEAN, STAFF WRITER
LENGTH: Medium: 58 lines
Two banking companies in the region said Thursday that their earnings for the 1994 fourth quarter and for the full year rose because of robust loan growth and improvements in asset quality.
Both companies - Charlotte-based First Union Corp. and Richmond-based Crestar Financial Corp. - reported higher earnings despite sustaining losses in the fourth quarter from selling low-yielding Treasury securities.
First Union, parent of First Union National Bank of Virginia, said its net income for the October-through-December quarter totaled $231.55 million, a 19 percent increase from $195.34 million in the year-earlier period.
Loan growth, especially growth in credit-card lending and other consumer lending, was strong throughout First Union's market, said Robert Atwood, the company's chief financial officer.
First Union's 1994 earnings also benefited from a sharp decline in nonperforming assets, which enabled the company to cut its provision for loan losses by 55 percent last year.
Per-share earnings were $1.28 a share, up from $1.12 in 1993 fourth quarter.
However, its per-share earnings for the December quarter were reduced to $1.04 after accounting for a previously announced redemption of preferred stock issued in 1990, First Union said.
For all of 1994, First Union reported net income of $925.38 million, a 13 percent increase from $817.52 million in 1993.
Earnings per share were $5.22, up from $4.73 in 1993. After accounting for the redemption of preferred stock, per-share earnings amounted to $4.98, compared with $4.73 a share the previous year.
The company's return on average assets, a measure of bank profitability, climbed to 1.27 percent in 1994 from 1.20 percent the previous year.
First Union's loans at year's end totaled $54.03 billion, a 15 percent increase from $46.88 billion at the end of 1993.
Separately, Crestar said its net income for the Dec. 31 quarter rose almost 10 percent to $42.4 million from $38.7 million in the year-earlier period. Per-share earnings were $1.13, up from $1.01 in the 1993 fourth quarter.
Its fourth-quarter results included a $9 million loss on the sale of $313 million of Treasury securities, Crestar said.
For the entire year, its net income rose 20 percent to a record $169.1 million from $140.5 million in 1993, Crestar said. Earnings per share were $4.47, up from $3.68 in 1993.
Its largest source of earnings, net interest income, climbed 10 percent in 1994 largely because of growth in its credit-card, mortgage and installment lending, Crestar said.
However, its non-interest expenses rose 12 percent in 1994, Crestar said, because of higher operating costs on seven acquisitions that it made last year.
The company's return on average assets rose to 1.24 percent in 1994 from 1.12 percent in 1993. by CNB