DATE: Friday, October 17, 1997              TAG: 9710170616

SECTION: BUSINESS                PAGE: D2   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

                                            LENGTH:   52 lines

THIRD QUARTER EARNINGS UP AT FIRST UNION, FLAT AT WACHOVIA

Citing improved efficiency and growth in its fee income, First Union Corp. said this week that third-quarter net income rose 14 percent.

Separately, Wachovia Corp. reported flat earnings for the July-through-September period due partly to additional spending on its expansion and higher provisions for loan losses.

Both North Carolina-based banking companies are in the process of acquiring Virginia banks.

First Union, based in Charlotte, has agreed to buy Signet Banking Corp. of Richmond. Winston-Salem, N.C.-based Wachovia is buying Central Fidelity Banks Inc. of Richmond and Jefferson Bankshares Inc. of Charlottesville.

All three transactions are scheduled to close this year.

Signet and Jefferson also reported third-quarter earnings on Wednesday.

First Union, which will have the largest share of Virginia bank deposits after acquiring Signet, said it earned $505 million in the three months ended Sept. 30.

That was up from $442 million in the year-earlier period when its earnings were depressed by a one-time assessment to strengthen the deposit insurance fund for the nation's savings banks.

First Union's per-share earnings for the recent quarter were 90 cents, compared with 81 cents.

That was on par with analysts' expectations. First Union's shares closed at $51.0625, down 31.25 cents.

First Union attributed the improved results partly to a 28 percent increase in non-interest income, which included fees from its investment banking and money-management units.

Meanwhile, Wachovia reported $167.3 million of third-quarter net income, a 1.6 percent increase from $164.6 million in last year's third quarter.

Per-share earnings were $1.03, up from 97 cents.

Wachovia's earnings benefited from a 7 percent increase in loans. However, its second-quarter net income was restrained by a 12.5 percent rise in non-interest expenses.

The company's results for the quarter were in line with investment community estimates. Wachovia's stock closed at $55.875, down 25 cents.

Central Fidelity Banks, which is due to be folded into Wachovia, reported last week that its net income for the quarter rose 26 percent to $31.67 million. Its per-share earnings climbed to 56 cents from 42 cents.

Among the Virginia banking companies reporting third-quarter earnings, Signet said its net income totaled $42.2 million, a 43 percent jump from $29.6 million for the comparable three months last year.

Per-share earnings were 68 cents, up from 49 cents.

Jefferson Bankshares said it earned $7.8 million in the recent quarter, an 8 percent increase from $7.2 million in the 1996 third quarter.

Jefferson's earnings per share rose to 55 cents from 48 cents.

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