Three big East Coast banks reported double-digit jumps in third-quarter earnings on Wednesday, fueled by wide interest spreads, burgeoning fee income, and improved asset quality.

Bank of New York Co. exceeded analysts' expectations with earnings of $98 million, up 66% from the year-earlier level and 13% from its strong second-quarter showing.

Wachovia Corp., bolstered by the sale of a consumer finance subsidiary, earned $108.8 million, 21% more than year-earlier income. The total, equal to second-quarter profits for the North Carolina company, met analysts' expectations.

Robust Recovery

New Jersey's First Fidelity Bancorp. continued its robust recovery with record earnings of $82.3 million. Profits were 48.8% higher than in the year-earlier period and 7.8% above those of the second quarter.

In late Wednesday trading on the New York Stock Exchange, Bank of New York was changing hands at $44.625 a share, up 50 cents. Wachovia had slipped 62.5 cents a share, to $66, and First Fidelity was up 50 cents, to $39.375.

BANK OF NEW YORK CO.

The nation's 15th-largest banking company reported its fifth consecutive decline in non-performing assets and continuing strong fees from processing businesses. Its return on assets, 0.92%, was the company's strongest since second-quarter 1989.

Noninterest income rose 10% over that of the year-earlier period, to $297 million, driven by $132 million of fees in areas such as trust and securities processing.

Net interest income rose 4%, to $325 million, while the spread between what Bank of New York paid for funds and earned on them widened to 2.88%, from 2.53% last year.

"We were looking for a strong quarter and got it," said John Leonard, an analyst with Salomon Brothers.

Total nonperforming assets at the $41.3 billion-asset company fell 7%, to $1.02 billion. Bank of New York's ratio of nonperforming assets to total assets declined to 3.6%, from 4% on June 30 and 5.3% a year ago.

Analysts were somewhat surprised by a steep 60% drop in foreign exchange income to, $16 million. Bank of New York is the first big New York-based bank to report earnings for a quarter rocked by volatile currency trading that was expected to benefit many banks.

"The customer flow was good, but the positions were not what they hoped for," said Mr. Leonard, who added that Bank of New York is a relatively conservative trader.

He said he expects stronger foreign exchange results in the next few days from J.P. Morgan & Co., Bankers Trust New York Corp., Chase Manhattan Corp., and Citicorp.

Bank of New York put $58 million of loans to Yugoslavia on nonaccrual status and saw expenses related to foreclosed real estate rise to $33 million in the third quarter, from $8 million three months earlier and $27 million one year earlier.

WACHOVIA CORP.

Earnings at the North Carolina giant, which has $31.4 million of assets, were driven by a 22% jump in noninterest income to $156.2 million and a 40% drop in the loan-loss provision to $28.2 million.

The spurt in noninterest income reflected a $19.5 million pretax gain from the sale of Provident Financial, Wachovia's consumer finance subsidiary. Excluding the special gain, noninterest income grew 7% from the year-ago period.

The bank company's net interest margin in the third quarter fell six basis points from the second quarter but was still a robust 4.76%, up from 4.51% one year earlier.

A Wachovia spokesman said the company recorded higher service charges, trust fees, and credit card income in the third quarter.

Wachovia, which has a sterling reputation for credit quality, saw net chargeoffs fall 51%, to $19.2 million, and nonperforming assets drop 3% from the second quarter to $280.4 million, or 1.39% of total assets.

The company added $4.2 million to bring its loan-loss reserve to $379 million, or an impressive 208% of nonperforming loans.

The slight drop in net interest margin from second to third quarter reflected a loss of income from Provident National.

Noninterest expenses jumped 11% to $289.7 million. Wachovia took $20.2 million of special charges during the quarter, including writedowns of deposit base intangibles and mortgage-servicing rights.

FIRST FIDELITY BANCORP.

Earnings at the New Jersey company, which has $28.9 billion of assets, were primed by a strong net interest margin of 4.73%, up from 4.59% in the second quarter. Total earnings were about $5 million higher than analysts' estimates, according to First Call Corp.

However, Anthony P. Terracciano, First Fidelity's chairman and chief executive, said in a prepared statement that commercial loan demand remains weak, depriving the company of "the full potential of the franchise."

First Fidelity, New Jersey's biggest bank, added about $3 billion of assets and 70 branches to its empire earlier this month by acquiring the failed Howard Savings Bank.

The net interest margin was helped by a slight rise in consumer loans. Noninterest expenses of $224.3 million virtually mirrored those recorded in this year's second quarter and in third-quarter 1991.

While total noninterest income was off slightly, fees on deposit accounts increased to $35.3 million, from $34.6 million in the 1991 quarter and $30.1 million in the second quarter of this year.

Nonperforming assets declined 7.2% to $751.2 million, while return on assets climbed to 1.14% from 1.06% in the second quarter.

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