First Union Corp. said it earned $140 million, or $1.06 a share, in the third quarter, more than double the $68 million earned in the year-ago quarter.
Charlotte-based First Union attributed its strong showing to a robust net interest margin and continuing favorable asset quality trends. The margin reached 5.18% in the third quarter, up 30 basis points from the second quarter and 89 basis points higher than the year-ago quarter.
The per-share earnings were a penny higher than First Union estimated on Sept. 17. The company earned 61 cents a share in the year-ago quarter.
First Union, like many banks, has been steadily repricing its deposits downward in the face of declining interest rates, which improves its net interest margin.
Loan quality is also improving. The loan-loss provision in the third quarter was $52 million, down 64% from $146 million reported in the year-ago quarter.
Nonperforming assets declined for the fourth straight quarter to $955 million, down 25% from $1.27 billion in the year-ago quarter and a decline of 13% from the second quarter.
So Far this Year
For the first nine months, First Union earned $356 million, or $2.77 a share, compared with $207 million, or $1.89 a share, in the year-ago period. The 1992 period includes $3 million in securities gains.
In the year-ago period, First Union received $85 million from the sale of securities and $30 million from selling mortgage servicing rights.
First Union announced on Sept. 21 that it expects to report earnings of between $480 million and $495 million for the full year, which would represent an increase of approximately 70% over the $286 million earned in 1991.