DATE: Tuesday, July 15, 1997                TAG: 9707150061

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

                                            LENGTH:   67 lines

NATIONSBANK, BB&T REPORT STRONG GAINS FOR QUARTER

Two rapidly expanding banking companies based in North Carolina - NationsBank Corp. and BB&T Corp. - reported robust increases in second-quarter net income, citing strong loan growth, higher fee income, and success at controlling costs.

Separately, Bank of Tidewater in Virginia Beach said its earnings for the June 30 quarter declined 1 percent because of additional costs from two new branches and a marketing campaign.

And in Hampton, the parent of Old Point National Bank said its net income for the recent quarter climbed 8 percent, partly because of higher net interest income from lending.

NationsBank, the Charlotte-based company that acquired Boatmen's Bancshares Inc. in St. Louis in January, said net income for the April-through-June period totaled $762 million. That was up 26 percent from $605 million in the comparable three months of 1996. The bank has branches in Hampton Roads.

However, earnings per share for the quarter increased only 5 percent, to $1.05 from $1, because the company had 20 percent more shares outstanding than in the year-earlier period.

In the wake of its merger with Boatmen's, NationsBank did not restate the results of previous quarters as if the two institutions had always functioned as a single company.

NationsBank's per-share earnings for the recent quarter were slightly ahead of most analysts' projections.

The largest source of its earnings, net interest income, rose 25 percent to $2.02 billion, while NationsBank's income from fees and other non-interest sources jumped 27 percent to $1.17 billion.

The company attributed the growth in non-interest income to higher earnings from fees on deposit accounts, asset management and fiduciary services, and investment banking.

In addition, NationsBank said, it generated greater revenues and savings from the Boatmen's merger than it projected late last year. ``Expense savings are coming in a little earlier than anticipated,'' said Susan Carr, a NationsBank spokeswoman.

Meanwhile, second-quarter net income at Winston-Salem-based BB&T rose 13 percent to $86.04 million from $76.17 million in the year-earlier quarter.

Per-share earnings for the bank were 78 cents, up from 69 cents. That surpassed a consensus of analysts' projections for the company's second-quarter results.

``Our earnings growth continues to be driven by higher non-interest income, a strong net interest margin and ongoing control of non-interest expenses,'' said the chairman and chief executive officer, John A. Allison, in a statement.

BB&T, parent of BB&T banks in North Carolina, South Carolina and Virginia, said earnings from non-interest sources rose 19 percent to $87.19 million. Its net interest income advanced 11 percent to $229.46 million.

However, BB&T's net interest income was up only 8 percent after it made a $19 million provision for loan losses. The latest addition to its loan-loss reserves was 43 percent ahead of the $13.26 million provision in the year-earlier quarter.

In Virginia Beach, Bank of Tidewater's second-quarter net income dropped to $539,424 from $546,998 in the year-earlier quarter. Per-share earnings were 29 cents, off from 30 cents for the June 30 quarter of 1996.

The Virginia Beach community bank's net interest income grew 15 percent to $2.14 million, but its non-interest expense for the recent quarter jumped 20 percent from the comparable period last year to $1.89 million.

Helped by a 6 percent improvement in net interest income and a smaller provision for loan losses, Old Point Financial Corp. earned $902,000 in the recent quarter, compared with $838,000 in the 1996 second quarter.

Earnings per share were 70 cents, up from 66 cents.

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