THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, October 13, 1995 TAG: 9510130575
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Medium: 60 lines
Helped by stronger earnings from investment banking and money-management services, First Union Corp. said Thursday that its net income for the Sept. 30 quarter rose 5.5 percent.
Two other banking companies in the region - Crestar Financial Corp. and First Virginia Banks Inc. - also reported higher net income for the third quarter.
However, Central Fidelity Banks Inc. said its net income for the quarter was flat, despite a $2.2 million profit on the sales of securities and a 9 percent increase in loans.
First Union, based in Charlotte, said it earned a record $255.02 million in the July-through-September period, compared with $241.75 million in the year-earlier quarter.
Per-share earnings climbed 11 percent to $1.50 from $1.35. First Union had 5 percent fewer common shares outstanding in the latestquarter.
In an explanation of the earnings improvements, First Union executives cited stronger loan growth in Florida, North Carolina and Virginia. Average net loans in the recent quarter were $62.33 million, almost 25 percent higher than the year-earlier average.
First Union executives also said the company's pending merger with New Jersey-based First Fidelity Bancorp. was on track for completion in January. First Union reached a merger agreement with First Fidelity in June, and shareholders of the two companies approved the agreement last week.
Meanwhile, Richmond-based Crestar reported an 11 percent increase in net income for the third quarter, citing growth in fee income and control of its operating expenses. Net income climbed to $48.4 million from $43.6 million in the comparable period last year.
Per-share earnings were $1.27, up from $1.15 in the 1994 third quarter.
Crestar registered a 1 percent drop in net interest income, which is generated from loans and investments. However, income from fees and other non-interest sources climbed 13 percent from the year-earlier quarter, Crestar said.
First Virginia Banks, based in Falls Church, reported a 6 percent increase in net income, which it attributed partly to the strength of its auto lending.
Net income for the Sept. 30 quarter totaled $29.27 million, or 86 cents. That was up from $27.59 million, or 85 cents, for the third quarter of 1994.
At Central Fidelity, net income totaled $27.55 million, up only slightly from $27.4 million for the comparable three months of 1994. Earnings per share dropped to 69 cents from 70 cents.
Despite loan growth of almost 10 percent since Sept. 30, 1994, Central Fidelity said its net interest margin had narrowed. Net interest margin is a measure of the spread between cost of a bank's funds and the yield on its loans and investments.
Central Fidelity's earnings also were affected by an $8.7 million provision for possible loan losses. The provision was more than double the amount set aside for loan losses in last year's third quarter. by CNB