Three Northeast banks reported improved third-quarter results Wednesday, a sign that the industry's recovery in the region continues despite a sluggish economy.

Fleet Financial Corp. reported earnings of $76.6 million, up 8.5% from the level in the second quarter and substantially higher than the $9.1 million it earned a year ago.

BayBanks Inc. reported earnings of $10.4 million, up 62.5% from the second-quarter level and well above the $1 million a year ago.

Republic New York Corp. reported earnings of $67.8 million, up 6.1% from the second quarter and 16.7% from the quarter a year ago.

Winning Combination

At Fleet, lower noninterest expenses, a lower loan-loss provision, and a gain on the sale of an asset pushed earnings higher.

A lower provision drove earnings higher at BayBanks, while increased trading income and gains on the sale of loans boosted earnings at Republic.

Fleet's stock was down 25 cents, to $29.625. Three weeks ago it had projected earnings of $75 million to $80 million.

BayBanks stock was up 25 cents, to $33.25. Its earnings exceeded analysts' estimates of $6.4 million.

Republic's stock was down 25 cents, to $43.

Loss Provision Drops

Noninterest expenses at Providence, R.I.-based Fleet fell 5% from the second quarter, to $534 million, excluding a one-time charge. Its loan-loss provision fell 17% from the second quarter, to $107.5 million.

Fleet, which has $45 billion in assets, was also able to continue shrinking its bad-asset portfolio. Nonperforming assets fell $90 million, or 6%, to $1.424 billion. They now represent 5.27% of loans and foreclosed real estate.

The company is expecting bad assets to fall much further soon. As it announced in September, it took a $115 million pretax charge in the quarter to write down about $500 million in bad assets it plans to sell.

It offset that charge with a $121 million gain on the sale of part of its mortgage company, creating a gain from the two of $6 million.

Fleet's also had a $12 million gain on the sale of securities.

Reserves Down at BayBanks

Boston-based BayBank's provision for loan losses and foreclosed real estate writedowns was $27.8 million, 28% lower than in the second quarter. Net interest margin was up 14 basis points higher.

The company, which has $9.6 billion in assets, also made progress reducing nonperforming assets. They fell to $514.3 million from $562.3 million in the second quarter. They now represent 8.28% of loans and foreclosed real estate.

Republic's release contained disturbing comments on economic conditions as well as news of higher profits.

The company, which has $33.4 billion in assets, raised its loan-loss provision for the third straight quarter, to $35 million.

|Difficulties' Foreseen

While it has fewer bad loans and higher reserve coverage than most banks, it said it was preparing for "continuing economic difficulties" in its domestic commercial business.

Republic said its trading income of $39.1 million reflected a "significant" profit from foreign exchange.

The company booked a gain of $11.6 million from loans that were sold or held for sale, up from $2.3 million in the year-earlier quarter. Fleet Financial Group Inc.Providence, R.I.Dollar amounts in millions (except per share) Third Quarter 3Q92 3Q91Net income $76.6 $9.1Per share 0.49 0.01ROA 0.67% 0.08%ROE 11.96% 1.05%Net interest margin 4.83% 3.94%Net interest income 507.9 407.5Noninterest income 410.8 323.0Noninterest expense 649.2 580.8Loss provision 107.5 127.5Net chargeoffs 102.0 100.0 Year to Date 1992 1991Net income $198.0 $62.0Per share 1.25 0.45ROA 0.59% 0.23%ROE 10.44% 3.43%Net interest margin 4.76% 3.93%Net interest income 1,469.4 985.0Noninterest income 1,019.2 745.4Noninterest expense 1,754.3 1,266.5Loss provision 348.1 337.8Net chargeoffs 310.7 276.4 Balance Sheet 9/30/92 9/30/91Assets $45,397.0 $46,059.0Deposits 031,564.0 035,990.0Loans 026,558.0 027,592.0Reserve/nonp. loans 114.00% 111.00%Nonperf. loans/loans 3.51% 3.84%Nonperf. asset/asset NA NALeverage cap. ratio 6.60% 5.81%Tier 1 cap. ratio 10.64% 9.35%Tier 1+2 cap. ratio 15.68% 12.87% Republic New York Corp.New YorkDollar amounts in millions (except per share) Third Quarter 3Q92 3Q91Net income $67.8 $58.1Per share 1.13 0.97ROA 0.72% 0.67%ROE 14.46% 14.07%Net interest margin 2.58% 2.29%Net interest income 185.8 144.5Noninterest income 85.2 69.8Noninterest expense 141.9 124.6Loss provision 35.0 16.0Net chargeoffs 28.3 23.0 Year to Date 1992 1991Net income $192.1 $169.1Per share 3.21 2.92ROA 0.70% 0.66%ROE 14.23% 14.38%Net interest margin 2.56% 2.24%Net interest income 533.8 424.0Noninterest income 214.7 205.7Noninterest expense 407.3 370.7Loss provision 85.0 48.0Net chargeoffs 71.1 56.7 Balance Sheet 9/30/92 9/30/91Assets $33,381.2 $30,883.1Deposits 19,032.8 20,723.2Loans 7,952.0 8,538.89Reserve/nonp. loans 161.5% 175.04%Nonperf. loans/loans 1.87% 1.52%Nonperf. asset/asset 0.57% 0.57%Leverage cap. ratio 6.05% 5.72%Tier 1 cap. ratio 16.73% 14.07%Tier 1+2 cap. ratio 28.92% 24.88%

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