
DATE: Wednesday, October 22, 1997           TAG: 9710220471

SECTION: BUSINESS                PAGE: D3   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

                                            LENGTH:   82 lines

BANKS' EARNINGS POST DOUBLE-DIGIT INCREASES

Helped by a healthier local economy and robust loan growth, several Hampton Roads community banks reported double-digit increases in third-quarter earnings.

Life Bancorp Inc., the biggest financial institution based in Hampton Roads, said its net income rebounded in the recent quarter to $3.43 million from $166,000 in the 1996 third quarter.

The Norfolk-based parent of Life Savings Bank attributed the improvement partly to an increase in its earning assets and to lower non-interest expenses.

In the year-earlier quarter, Life's earnings were sharply reduced by a one-time assessment for strengthening the deposit-insurance fund for savings banks.

In Suffolk, James River Bankshares Inc. said its net income for the three months ended Sept. 30 grew partly because of greater residential and commercial real estate lending. Like several other community banks, the parent of Bank of Suffolk also benefited from lower overhead and a smaller provision for loan losses.

Compared to last year, James River's earnings were depressed by the cost of a new operations facility and the one-time assessment for replenishing the deposit insurance fund for savings banks.

The region's community banks also have benefited from a wider spread between the cost of their funds and what they earned on loans and investments. At Bank of Tidewater in Virginia Beach, president Betsy Duke said the spread has continued to widen longer than she thought possible.

Some banks, including Bank of Tidewater, also have been helped by the improved financial health of their commercial borrowers and declining levels of troubled loans.

``Even though there has been an increase in consumer bankruptcies, you haven't had a lot of business bankruptcies,'' Duke said.

Virginia Beach Federal Financial Corp., parent of First Coastal Bank, said net income for the July-through-September period jumped 59 percent partly because of increased lending for residential construction and real estate development.

This loan growth has been helped by the expansion of its First Coastal subsidiary into the Williamsburg market, said Dennis R. Stewart, Virginia Beach Federal's chief financial officer.

Stewart said a better mix of funds, including additional funds from checking accounts, helped Virginia Beach Federal's net interest income in the recent quarter.

``The 60 percent growth can't occur forever, but we should still see good growth,'' he said.

Its third-quarter earnings also were helped by a 43 percent increase in earnings from fees and other non-interest sources.

At Resource Bank in Virginia Beach, net income rose 18 percent. The bank attributed part of the improvement to having more earning assets and handling greater volume of first mortgages by its mortgage banking unit.

Commonwealth Bankshares Inc. in Norfolk said its third-quarter earnings climbed 60 percent.

Old Point Financial Corp., Hampton parent of Old Point National Bank, reported a 25 percent increase in earnings for the Sept. 30 quarter.

Old Point's earnings were helped by growth in net interest income, a lower provision for loan losses and lower non-interest expenses.

Life Bancorp Inc.

Net income for 1997 third quarter: $3.43 million; 35 cents per share.

Net income for 1996 third quarter: $166,000; 2 cents per share.

James River Bankshares Inc., Suffolk:

Net income for 1997 third quarter: $968,000; 39 cents per share.

Net income for 1996 third quarter: $353,000; 14 cents per share.

Virginia Beach Federal Financial Corp., Virginia Beach:

Net income for 1997 third quarter: $1,099,000; 22 cents per share.

Net income for 1996 third quarter: $689,000; 14 cents per share.