Fueled by strong loan demand and the continued strength of the California economy, three San Francisco Bay-area banking companies reported record earnings in the second quarter.

Bay View Capital Corp. in San Mateo said net income climbed 60% in the quarter, to $7.5 million, from a year earlier. Greater Bay Bancorp in Palo Alto reported earnings of $6.5 million, up 25%, and UCBH Holdings Inc. in San Francisco said profits soared almost 69%, to $4.8 million.

The banner quarter prompted analysts to upgrade their recommendations on the stock of Greater Bay and Bay View and to boost 1999 estimates for all three companies.

The strong showings can be traced largely to the health of the local economy, which continues to flourish despite decreased Asian demand for U.S. exports.

A report issued last week by the Bay Area Council, a business-sponsored public policy group, said the region added 78,000 jobs during the first quarter.

The region's 3.4% unemployment rate, though up slightly from a year earlier, is among the lowest in the nation and well below the state's rate of 5.8%.

Bay View, a former thrift with $5.1 billion of assets, attributed its gains to an 11.5% rise in net interest income and a 200% jump in fee income. Fees were driven mainly by the company's thriving automobile leasing unit.

Greater Bay, with $2.1 billion of assets, earned 55 cents per share in the second quarter, beating the analysts' consensus by 3 cents. Loans grew 44%, to $1.3 billion, and revenues jumped 44%, to $25.7 million.

"Greater Bay's revenue growth is what sets them apart from their peers," said Joseph K. Morford 3d, a bank analyst at First Security Van Kasper in San Francisco.

UCBH, a $2.2 billion-asset company that converted from a thrift last year, also reported strong loan growth. Commercial loans rose 59%, to $861 million, and net interest income increased 38%, to $17.2 million.

The company said that it has $20 million to $25 million of commercial loans in the pipeline.

"This is just the beginning," said Tommy S. Wu, UCBH's president and chief executive officer. "We anticipate better results going forward."

Analysts added 15 cents to Greater Bay's per-share earnings estimate, bringing it to $2.30, and two firms improved their recommendations on the company's stock to "strong buy" from "buy."

Hoefer & Arnett Inc. in San Francisco raised UCBH's earnings estimate 20 cents, to $1.95 a share, and U.S. Bancorp Piper Jaffray in Minneapolis raised its forecast for Bay View by 5 cents, to $1.61.

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