Record earnings posted by First Union in quarter 23% rise reported, to $883 million

Banking

July 15, 1998|By Bill Atkinson | Bill Atkinson,SUN STAFF

First Union Corp. reported yesterday record income of $883 million in the second quarter, up 23 percent before merger-related and restructuring charges.

The nation's sixth-largest banking company made 92 cents per diluted share in the second quarter, which ended June 30, up 24 percent from the 74 cents per diluted share in the same time year earlier.

The results beat Wall Street analysts' estimates by 2 cents, said Zacks Investment Research, which tracks earnings predictions.

After $634 million in merger-related charges in the second quarter, the Charlotte, N.C.-based company made $249 million, or 26 cents per diluted share, down from $682 million, or 70 cents a share.

"They had a good quarter," said Henry C. Dickson, an analyst at New York-based Salomon Smith Barney. "It looks like it ought to be a good year."

First Union's stock closed at $64.8125, up $1.8125.

Like its larger North Carolina neighbor, NationsBank Corp., First Union has shown a voracious appetite for acquisitions. The second-quarter charges were primarily related to two acquisitions, of Philadelphia-based CoreStates Financial Corp. and Signet Banking Corp.

"We have completed all pending acquisition, and we are focused on developing our existing businesses, including capital management and capital markets, which continue to drive revenue growth," First Union Chairman and Chief Executive Edward E. Crutchfield said in a statement.

For the first half of the year, First Union made $1.7 billion, or $1.75 per diluted share before merger-related and restructuring charges, 19 percent more than in the same period in 1997.

After the charges, the company made $1.03 billion, or $1.07 per diluted share, in the second quarter, compared with $1.4 billion, or $1.42 in the same period a year earlier.

First Union's capital management and capital markets businesses drove earnings in the quarter and first half of the year.

The capital management group, which sells mutual funds, annuities and brokerage services to retail customers, reported income of $443 million in the quarter, 61 percent more than a year earlier.

The capital markets group, which provides sophisticated financing products for businesses, made $397 million in the quarter, up 53 percent from a year earlier.

Pub Date: 7/15/98

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