THE VIRGINIAN-PILOT  
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Friday, October 27, 1995               TAG: 9510270499
SECTION: BUSINESS                 PAGE: D3   EDITION: FINAL  
SOURCE: BY TOM SHEAN, STAFF WRITER
                                             LENGTH: Medium:   65 lines

CORRECTION/CLARIFICATION: ***************************************************************** CENIT Bancorp Inc. reported a decline in net income for the three months ending Sept. 30. In Friday's Virginian-Pilot, a headline incorrectly reported that the company suffered a loss. Correction published in The Virginian-Pilot, Saturday, October 28, 1995, on page D2. ***************************************************************** CENIT BANCORP. FAULTS MERGER FOR QUARTER LOSSES NET INCOME TUMBLED 68% IN THIRD QUARTER.

Blaming merger-related expenses from its Aug. 1 acquisition of Princess Anne Bank in Virginia Beach, CENIT Bancorp. said Thursday its third-quarter net income tumbled 68 percent.

CENIT, the Norfolk holding company that also owns CENIT Bank, said it earned $375,000 for the three months ended Sept. 30. That compared with $1.19 million for the year-earlier period.

Its per-share earnings were 22 cents, down from 73 cents.

Separately, the parent of Virginia Beach Federal Savings Bank reported a profit of $390,000, or 8 cents a share, for the July-through-September quarter.

The thrift holding company, Virginia Beach Federal Financial Corp., lost $331,000, or 7 cents a share, in the comparable three months of 1994.

In addition to having one-time expenses from its acquisition of Princess Anne Bank, CENIT suffered a modest decline in net interest income during the recent quarter and increased its provision for possible loan losses.

However, brokerge fees on the sale of commercial mortgage loans, gains of sales of individual loans, and loan servicing boosted its non-interest income for the third quarter by 56 percent to $1.14 million.

For the nine months through September, CENIT said its net income skidded 31 percent to $2.15 million from $3.11 million. Earnings per share dropped to $1.29 from $1.91.

CENIT also announced a quarterly dividend of 10 cents, payable Nov. 20 to shareholders of Nov. 2.

Meanwhile, Virginia Beach Federal Financial attributed its third-quarter earnings to $260,000 of net income from retail banking and $130,000 of net income from mortgage banking.

In the comparable three months last year, the company suffered losses of $59,000 in retail banking and $272,000 in mortgage banking.

Virginia Beach Federal said part of the recovery in earnings was due to greater loan production and reduced operating expenses at its Beach Fed mortgage-banking subsidiary.

The reduction in expenses came partly from a 20 percent cutback in Beach Fed's work force since last March, the company said. The mortgage-banking unit now employs 98.

Meanwhile, employment at Virginia Beach Federal Savings Bank has dropped 8 percent since last March to 156, the parent company said.

For the nine months, the company reported net income of $765,000, or 16 cents a share.

In the year-earlier period, Virginia Beach Federal lost $1.58 million, or 32 cents a share, partly because of downward adjustments made in the value of interest-rate swaps on its books. by CNB