Crestar Financial Corp.'s net income rose 13 percent in the second quarter as the company held down expenses and generated higher income from products and services and from the sale of a credit-card processing unit, the company said yesterday.
Crestar, which is Virginia's largest banking company with $22.8 billion in assets, reported net income of $75.8 million in the second quarter that ended June 30, or 68 cents a share, compared with $66.9 million, or 60 cents for the same period in 1996.
"We feel it was a very solid quarter," said Eugene S. Putnam Jr., senior vice president and head of investor relations.
Crestar's net income rose 12 percent to $147.6 million, or $1.32 per share for the first six months of the year, compared with $132 million, or $1.18 a share.
The company's stock advanced $1.43 to close at $41.56 a share yesterday.
Crestar has 115 branches in Maryland and roughly $6 billion in assets. It operates 35 branches in the Baltimore region. The company has been building its Baltimore presence in the last year and a half.
It acquired Loyola Capital Corp., the city's largest savings and loan with $2.5 billion in assets, late in 1995. And in December, it snapped up Citizens Bancorp. of Laurel, which had $4.2 billion in assets. Last month, it agreed to buy American National Bancorp Inc., a Baltimore savings and loan with $505 million in assets. The deal will give Crestar 10 additional branches.
Crestar's earnings were fueled by an increase in interest income generated from fees on products and services, which rose 21 percent to $111.1 million in the quarter. The company took in $17.3 million in the quarter from the sale of a merchant card processing unit.
Expenses also fell about $1.7 million to $179 million in the second quarter. Expenses would have fallen further, but the company spent $4.3 million upgrading its computer system and $1.5 million in nonrecurring expenses related to the Citizen acquisition.
Merrill Ross, a banking analyst with Friedman, Billings, Ramsey & Co. of Arlington, Va., said Crestar's earnings were solid, "but still not emphatic enough to support a higher valuation."
She said the company has focused on merging the Citizens operation and reducing the size of its credit-card portfolio.
The company will trim the $1.2 billion credit-card portfolio by at least another $100 million, Putnam said. Crestar wrote off $25.7 million in bad loans in the quarter -- $23 million of which were from credit cards.
Pub Date: 7/11/97
