DATE: Friday, October 10, 1997              TAG: 9710100625

SECTION: BUSINESS                PAGE: D2   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

                                            LENGTH:   55 lines

VA.-BASED BANKS HAVE GOOD THIRD QUARTER

Citing stronger loan demand, additional fee income and greater efficiency, a handful of Virginia-based banking companies reported sharply higher earnings for the three months ended Sept. 30.

Crestar Financial Corp. said its third-quarter net income jumped 65 percent from the year-earlier period, while First Virginia Banks reported a 21 percent increase.

Central Fidelity Banks Inc., which is due to be acquired by Wachovia Corp. of Winston-Salem, N.C., said its third-quarter net income was up 26 percent.

Also, CENIT Bancorp Inc., parent of CENIT Bank and Princess Anne Bank, reported a rebound in third-quarter income.

Crestar, based in Richmond, reported record net income of $79.54 million for the July-through-September period. That was up from $48.12 million in the 1996 quarter. Earnings per share were 71 cents, compared with 43 cents.

Crestar's income for the recent quarter was helped by strong growth in consumer installment loans and a smaller provision for loan losses. In last year, Crestar's earnings were reduced by an assessment to help strengthen the deposit-insurance fund for thrifts.

Meanwhile, First Virginia attributed the improvement in its third-quarter results partly to higher earnings from auto lending and to sources of non-interest income. The Falls Church-based company earned a record $34.72 million, which was up from $28.59 million inthe comparable quarter in 1996.

Per-share earnings rose 67 cents from 57 cents.

First Virginia's earnings included a $1.5 million gain on the sale of mortgage servicing rights and a $2.07 million gain from selling three branches.

The sale of branches, along with $44 million of deposits and $21 million of loans, was required as part of First Virginia's acquisition of another company in May.

Separately, Central Fidelity said it earned $31.67 million in the quarter, compared with $25.13 million a year earlier. Its earnings per share were 56 cents, up from 42 cents.

For the Richmond-based parent of Central Fidelity Bank, net interest income grew 8 percent to $103.9 million partly because of a wider spread between the cost of funds and yield on loans and investments.

Higher income from trust services, profits on the sale of securities, and additional fee income generated a 24 percent improvement in non-interest income for the quarter.

At CENIT Bancorp, net income for the quarter totaled $1.71 million, or $1.02 a share.

In the year-earlier quarter, the banking company lost $115,000 after paying a special industry-wide assessment to help replenish the deposit-insurance fund for thrifts. Without this assessment, it would have earned $1.34 million, or 80 cents a share, for the 1996 third quarter, Norfolk-based CENIT said.

Its net interest income for the latest quarter increased 5 percent to $5.4 million, while income from fees and other non-interest sources rose 31 percent to $1.38 million.

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