First union Crop. of Charlotte, N.C., will earn at least as much in the second half of 1992 as it did in the first half, when it netted $1.71 a share, according to Edward Crutchfield, chairman and chief executive.

He made the forecast after meeting with securities analysts in New York this week.

He predicted that loss provisions would decline in the second half, margins would stay wide, and business such as mortgages and home equity lending would have a strong earnings growth.

Mr. Crutchfield said loan growth in general would remain sluggish through 1993, with pay-downs of old loans offsetting some growth in originations. Mortgage lending has been particular active.

Forecast for Margins

For the rest of 1992, he sees net interest margins staying between the first quarter's 4.66% and the second quarter's 4.88% unless there is an abrupt change in interest rates.

First Union will keep reducing the rates it pays depositors. It repriced $4 billion of deposits in the last three to four months and will reprice that much in the rest of this year, he said.

Meanwhile, First Union has locked in wide interest rate spreads through off-balance-sheet instruments, "which should give us a substantial help through 1993.

"Another reason for optimism in 1992 is credit quality." Mr. Crutchfield added. "Non performing assets have gone down for the third straight quarter." He said this would continue as long as the company stays on its present course.

Mr. Crutchfield stressed the ongoing importance to earnings of cost cuts, resulting in flat projected expense levels in 1993.

As in the past, Mr. Crutchfield would not be pinned down on First Union's acquisition plans. He said he prefers to remain in the South but will go where there is a "good deal."

Special Deal Sought

"We have got to figure out a way not to take a shot in the chest," Mr. Crutchfield said. "We have to take a deal - a government-sponsored acquisition, a turnaround situation, something with something special Virginia is a nice state."

First Union, with $47.7 billion in assets, operates in the Carolinas, Florida, Tennessee, and Georgia.

"I don't know what shape consolidation will take in the next five years," Mr. Crutchfield said. "Maybe mergers of equals will be the hot thing. If we do that, the only way it would make sense is if we come out better than we are now.

"If we do a $10 billion bank deal, and we have to have our head held under water for two years until the bubbles come up, it's not worth it."

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