First Union's earnings declined 15% in 4th quarter


January 15, 2000|By BLOOMBERG NEWS

CHARLOTTE, N.C. -- First Union Corp. said yesterday that its fourth-quarter profit fell 15 percent, meeting reduced expectations, as mortgage fees fell and expenses grew.

The Charlotte, N.C.-based bank had reduced its earnings outlook twice last year, partly because of lower-than-expected revenue from its 1998 purchase of Co- reStates Financial Corp. in Philadelphia.

Profit from operations fell to $846 million, or 86 cents a share, from $993 million, or $1, in the fourth quarter a year earlier.

Fee and other income, excluding a $7 million loss on securities transactions, rose 12 percent to $1.84 billion, as capital markets fees, including investment banking, rose 44 percent to $492 million.

Some of the difficulty occurred as residential mortgage banking fees fell 70 percent to $52 million, after higher interest rates reduced refinancing and loan origination. Also, noninterest expense rose 3.2 percent to $2.35 billion.

Capital-management income, including retail brokerage fees, rose 63 percent to $773 million. It got a boost from the Oct. 1 purchase of the Everen Capital Corp. brokerage.

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