First Union Corp. reported a 70% increase in earnings for the second quarter, to $125.4 million, from $73.6 million a year ago.

The per-share figure of 90 cents exceeded the Charlotte-based company's forecast, issued June 11, of 84 to 88 cents.

First Union's stock price was up $1.125 a share, to $39.125 late Thursday afternoon.

First Union earned 61 cents a share in the year-ago quarter, before it acquired Southeast Banking Corp., Miami.

The North Carolina company, which has $47.7 billion in assets, attributed its strong second-quarter performance to cost savings from the Southeast acquisition, which was engineered by regulators last September, as well as continuing strength in its net interest margin and improved credit quality.

Lower Costing Funds

Like most banks, First Union continues to benefit from lower interest rates. The net interest margin of 4.88% in the second quarter was up 22 basis points from the first quarter and 65 basis points from the second quarter of 1991.

Nonperforming assets declined for the third straight quarter, to $1.1 billion, or 3.36% of total assets. The loan-loss provision was $62 million, down 25% from $83 million in the first quarter.

Analysts expect other southeastern superregionals to report double-digit percentage increases in income for the second quarter, in large part because of strong net interest margins.

Sun Trust Banks Inc., Atlanta, has issued an estimate of $103 million, up 11% from the year-ago quarter. Consensus estimates suggest Barnett Banks Inc., Jacksonville, Fla., will be up 54%, to $45 million; NationsBank Corp., Charlotte, N.C., 24%, to $245 million; and Wachovia Corp., Winston-Salem, N.C., 10%, to $106 million.

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