Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, April 15, 1993 TAG: 9304150057
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: DANIEL HOWES STAFF WRITER
DATELINE: LENGTH: Medium
FIRST UNION TOPS ITSELF
First Union Corp. on Wednesday reported record earnings for the first quarter, despite completion of several costly acquisitions - including the purchase of Dominion Bankshares Corp.The Charlotte, N.C.-based company posted earnings of $193 million, a 160 percent increase over the $74 million in last year's January-through-March quarter. Income per share of common stock rose to $1.17, compared with 49 cents in 1992's first quarter.
"Our record first-quarter results . . . demonstrate First Union's earnings momentum," Chairman Edward E. Crutchfield Jr. said in a statement. "Because of our ability to rapidly integrate acquisitions, we are optimistic about the benefits of the acquisitions closed earlier this year."
Even though First Union expects the pending acquisitions of Washington-area First American Metro Corp. and Georgia Federal Bank "to dilute earnings slightly" later this year, Crutchfield said the company expects them "to begin to contribute to profitability in 1994."
In a conference call with reporters across the Southeast, Chief Financial Officer Robert Atwood attributed the strong quarter to continued cost controls, which he said "made a direct contribution to the bottom line."
Cost-cutting at the former Dominion operations in Roanoke - which First Union acquired March 1 - have proven unsettling to Dominion veterans accustomed to less stringent methods. But First Union officials have staunchly defended the practice, and point to results like those announced Wednesday to justify expense controls.
Atwood said "it's difficult to track" how much each First Union bank - for example, First Union National Bank of Florida or First Union of Virginia, the former Dominion - contributes to the company's performance.
Officials also credited the strong results to increases in both net interest and fee income and declines in reserves set aside for loan losses - to $60 million from $135 million a year earlier.
First Union saw a $17 million one-time gain from recently acquired securities portfolios, accounting for 6 cents of the $1.17 earnings per common share.
At the same time, company officials said they discern marked improvements in general economic trends, which they expect to bolster earnings. "We're encouraged that many of our markets are beginning to turn up and are improving," said Malcolm Murray, chief credit officer.
Key credit indicators - nonperforming assets, loan-loss provisions and charge-offs - continued to improve in the first quarter, he said.
Net loans at March 31 were $40.9 billion, compared with $41.6 billion a year before. In the same periods, deposits were $47.9 billion compared with $48.8 billion.