Fee income, cost controls, and the sales of some operations contributed to favorable earnings reports Wednesday by several major banking companies.

At the third-largest, BankAmerica Corp., profits rose 20%, to $819 million. David A. Coulter, chairman and chief executive officer, said he "was pleased with the increase in revenue growth resulting from strong capital market activities and a strengthening California economy."

First Union Corp. also benefited from higher fee income and reduced expenses. Its earnings soared 41%, to $505 million, though in the 1996 third quarter the company took $86 million in special charges. Factoring those out, the net was up 14%.

"Our capital markets and capital management groups continue to contribute significantly to our earnings momentum," said Edward E. Crutchfield, chairman and chief executive officer.

At Fleet Financial Group net income was up 12%, to $329 million. PNC Bank Corp. also said profits rose 12%, to $262 million, and Republic New York Corp. had a 4% advance, to $112.3 million.

A credit-card alarm sounded at Wachovia Corp. It cited card losses and increased spending as reasons for a mere 2% increase, to $167 million. State Street Corp. had a 36% rise, to $101 million.

BankAmerica

San Francisco-based BankAmerica Corp. said income per share was $1.11, 2 cents better than analysts' estimates.

The $257.4 billion-asset company said noninterest income rose 27%, to $1.67 billion. BankAmerica posted across-the-board gains in fee-based businesses, and also benefited from the sale of its consumer finance subsidiary, Security Pacific Financial Services Inc. That contributed $246 million to noninterest income.

The extraordinary gain was offset somewhat by a $112 million charge for divesting 75 supermarket banking offices in Chicago. BankAmerica said the charge would account for asset disposition, personnel expenses and other costs.

BankAmerica had experimented with creating a retail branch network solely through Chicago's largest supermarket chain, but chief financial officer Michael E. O'Neill said the company decided after two years that "it was unlikely the investment would generate acceptable returns."

Likewise, BankAmerica said Wednesday it was also seeking a buyer for its mobile-home lending unit. (See story on front page.)

BankAmerica also had gains from securities, a $67 million increase in the company's litigation reserves to account for "multiple" legal matters, writedowns on corporate real estate and a $30 million contribution to the company's charitable foundation.

"It was a noisy quarter," said Mr. O'Neill. "We had a lot of things going on, but it doesn't hide the fact we had another solid quarter."

First Union Corp.

At Charlotte, N.C.-based First Union, earnings per share of 90 cents beat consensus estimates by a penny.

The quarter was "fueled by the delivery of new products to an expanding customer base," said Robert T. Atwood, First Union's chief financial officer. "We're growing revenues while maintaining our expense discipline."

Mr. Atwood said the company was particularly pleased with its noninterest income, which was helped by the capital markets and capital management areas. Those businesses pushed fee income overall to 36% of total revenues.

Revenues in the capital markets group increased 41% while capital management reported a 46% jump.

"Fee income growth was great," said Marguerite Sons, an analyst with Interstate/Johnson Lane. "They are getting very close to their goal."

Fleet Financial Group

Fleet reported net income of $1.20 a share, off a penny from analysts' estimates.

The nation's 12th-largest bank, with $83.6 billion of assets, said revenues from fee-based businesses fueled the gains.

Noninterest income was $514 million, up 2% The jump would have been higher had Fleet not sold two fee-generating units-Fleet Auto Finance, bought by Sovereign Bancorp in July, and Option One, a subprime mortgage lending unit sold to H&R Block in April.

Revenues from investment services, including Fleet Investment Advisors, grew 11%, to $104 million.

Income from banking service charges and commissions grew 4%, to $159 million. Income from mortgage banking declined 31%, to $66 million.

Nonperforming assets declined 36%, to $479 million.

Total revenue was $1.44 billion, essentially even from last year's $1.439 billion.

PNC Bank Corp.

PNC's profits of 83 cents per share met analysts' estimates. Noninterest income rose 28% over the third quarter a year earlier, to $446 million, while net interest income declined 1.5%. Loans rose 4% to $1.27 billion.

Noninterest income contributed 41% of total revenues, the company said.

"Our third quarter results reflect continuing progress in the strategic transition of our organization," said Thomas H. O'Brien, PNC's chairman and chief executive.

Asset management and service fees were the biggest contributors to noninterest income. Asset management revenue grew 24%, while service fees jumped 22%. PNC also realized gains in mortgage banking.

PNC "showed good fee growth, flat expenses and benefited from continued share repurchases," said Michael Mayo, an analyst with Credit Suisse First Boston.

Republic New York Corp.

Republic, with $57.8 billion of assets, reported earnings per share of $1.95, hitting consensus estimates.

Net interest income grew 4%, to $256.8 million. Average loans grew 17.6%, to $14.3 billion. But the net interest margin narrowed from 2.47% to 2.28%.

Net chargeoffs declined 63%, to $3.3 million.

Noninterest income jumped 18%, to $129.6 million. Unlike many of its peers, Republic posted a drop in revenues from securities and commodity trading-down 9%, to $39.7 million.

Analysts were surprised by the decline. "In foreign exchange and precious metals, they were way off," said Stephen Biggar from S&P Equity Group.

But the company had gains in its own portfolio. Republic earning's from Safra Republic Holdings, SA, a European private bank owned 49% by Republic, jumped 35%, to $32 million.

Fees from brokerage services and other retail services were $21.9 million, up 20%. Fees from deposit accounts, mortgage services and trust grew 14%, to $22.9 million.

Wachovia Corp.

Increased spending and greater credit card losses dampened earnings growth at Wachovia.

The $47.7 billion-asset company reported earnings per share of $1.03 for the quarter, up from 97 cents a year earlier, and a penny off consensus estimates.

Wachovia took a hit from credit cards in the quarter, making a $50.3 million provision for an equal amount of net loan losses.

The provision was up 23.6% from the same quarter in 1996. Of $50.3 million in loan losses in the quarter, all but $5.5 million were attributable to credit cards, the company said.

Robert McCoy Jr., Wachovia chief financial officer, said the losses were in line with Wachovia's expectations. He said the company expected more losses in the fourth quarter.

Additionally, Wachovia officials said third-quarter earnings suffered from $30 million spent on year-2000-related conversion projects and because of aggressive spending for growth initiatives. In all, 5% of the 8% increase in core expenses was attributable to growth initiative spending, said Mr. McCoy. Advertising expenses associated with Wachovia's branding campaign also were a drag on earnings.

Despite the lackluster earnings growth, company officials said Wachovia saw good revenue growth. That was led by fees from trust services, up 14.6%; credit cards, up 12.9%; investment income, up 32%; and capital markets up 61%.

State Street Corp.

State Street's earnings per share of 62 cents beat consensus estimates by 4 cents.

With $35.5 billion of assets, State Street is among the top three banks in specialties such as custody, administration, and fiduciary services.

Executives said the strong showing reflected new business, the expansion of existing customer relationships, and favorable market conditions.

"From a financial point of view, it was the most outstanding quarter we've had," said David Spina, president and chief operating officer, in a telephone interview. "It clearly signals progress in sustainable parts of the business."

Analysts said State Street benefited particularly from foreign exchange, where trading revenue grew 60%, to $74 million.

Overall revenues ballooned 30%, to $612 million, on the strength of fee- based businesses, which accounted for 72% of the revenue total, the bank said.

"Revenue growth was broad-based, and I think it will be enduring, at least for the short term," said Thomas Theurkauf, an analyst at Keefe, Bruyette & Woods.

Comerica Inc.

Earnings per share of $1.23 beat analysts' projections by 3 cents.

Noninterest income was $136 million, compared with $116 million during the third quarter a year ago. Included in that number was a $6 million gain from the sale of the company's bond indenture business.

Excluding the effect of nonrecurring items and divestitures in the third quarters of 1996 and 1997, the company would have reported an 18% increase in fee income, including gains from fiduciary income, investment banking and service charges on deposit accounts.

Interest income was up 2% from a year ago as a result of loan growth, the company said. +++

BankAmerica Corp.

San Francisco Dollar amounts in millions (except per share) Third Quarter 3Q97 3Q96 Net income $819.0 $683.0 Per share 1.11 0.87 ROA 1.26% 1.12% ROE 16.82% 14.16% Net interest margin 4.06% 4.17% Net interest income 2,194.0 2,152.0 Noninterest income 1,670.0 1,319.0 Noninterest expense 2,232.0 2,081.0 Loss provision 260.0 235.0 Net chargeoffs 259.0 226.0 Year to Date 1997 1996 Net income $2,398.0 $2,126.0 Per share 3.20 2.69 ROA 1.26% 1.18% ROE 16.69% 14.92% Net interest margin 4.11% 4.26% Net interest income 5,832.0 5,792.0 Noninterest income 4,497.0 3,913.0 Noninterest expense 6,312.0 6,091.0 Loss provision 730.0 665.0 Net chargeoffs 687.0 711.0 Balance Sheet 9/30/97 9/30/96 Assets $257,520.0 $242,953.0 Deposits 171,413.0 164,901.0 Loans 166,986.0 161,833.0 Reserve/nonp. loans 376.7% 313.8% Nonperf. loans/loans NA NA Nonperf. assets/assets 0.55% 0.69% Nonperf. assets/loans + OREO 0.56% 0.69% Leverage cap. ratio NA NA Tier 1 cap. ratio 7.63% 7.30% Tier 1+2 cap. ratio 11.59% 11.35%

Fleet Financial Group Boston Dollar amounts in millions (except per share) Third Quarter 3Q97 3Q96 Net income $329.0 $295.0 Per share 1.20 1.02 ROA 1.60% 1.35% ROE 19.89% 17.83% Net interest margin 5.23% 5.01% Net interest income 926.0 934.0 Noninterest income 514.0 505.0 Noninterest expense 791.0 861.0 Loss provision 85.0 65.0 Net chargeoffs 93.0 110.0 Year to Date 1997 1996 Net income $968.0 $836.0 Per share 3.48 2.91 ROA 1.58% 1.36% ROE 19.65% 17.34% Net interest margin 5.21% 4.75% Net interest income 2,744.0 2,529.0 Noninterest income 1,730.0 1,484.0 Noninterest expense 2,584.0 2,416.0 Loss provision 233.0 148.0 Net chargeoffs 285.0 246.0 Balance Sheet 9/30/97 9/30/96 Assets $83,575.0 $87,194.0 Deposits 62,907.0 67,553.0 Loans 59,264.0 60,086.0 Reserve/nonp. loans 314.73% 218.03% Nonperf. loans/loans 0.77% 1.18% Nonperf. assets/assets 0.57% 0.87% Nonperf. assets/loans + OREO 0.81% 1.26% Leverage cap. ratio 7.25% 6.60% Tier 1 cap. ratio 7.17% 7.13% Tier 1+2 cap. ratio 10.85% 10.91%

PNC Bank Corp. Pittsburgh Dollar amounts in millions (except per share) Third Quarter 3Q97 3Q96 Net income $261.6 $234.0 Per share 0.83 0.68 ROA 1.47% 1.34% ROE 20.11% 16.16% Net interest margin 3.89% 3.85% Net interest income 627.4 616.9 Noninterest income 445.7 348.4 Noninterest expense 638.6 595.4 Loss provision 20.0 0.0 Net chargeoffs 73.0 37.0 Year to Date 1997 1996 Net income $787.0 $720.3 Per share 2.43 2.08 ROA 1.49% 1.35% ROE 19.93% 16.71% Net interest margin 3.91% 3.77% Net interest income 1,885.3 1,853.0 Noninterest income 1,304.2 1,006.5 Noninterest expense 1,913.6 1,725.4 Loss provision 45.0 0.0 Net chargeoffs 192.0 107.0 Balance Sheet 9/30/97 9/30/96 Assets $71,828.0 $69,662.0 Deposits 44,788.0 45,430.0 Loans 53,651.0 49,443.0 Reserve/nonp. loans 324.25% 306.11% Nonperf. loans/loans 0.59% 0.76% Nonperf. assets/assets 0.55% 0.72% Nonperf. assets/loans + OREO 0.73% 1.01% Leverage cap. ratio 7.46% 7.18% Tier 1 cap. ratio 7.80%* 8.29% Tier 1+2 cap. ratio 11.50%* 11.79%

*Estimated

State Street Corp. Boston Dollar amounts in millions (except per share) Third Quarter 3Q97 3Q96 Net income $101.0 $74.0 Per share 0.62 0.45 ROA 1.11% 1.00% ROE 21.40% 18.30% Net interest margin 2.17% 2.23% Net interest income 164.0 139.0 Noninterest income 442.0 324.0 Noninterest expense 451.0 350.0 Loss provision 5.0 2.0 Net chargeoffs 0.0 1.0 Year to Date 1997 1996 Net income $280.0 $215.0 Per share 1.71 1.31 ROA 1.09% 0.99% ROE 20.70% 18.10% Net interest margin 2.20% 2.23% Net interest income 468.0 404.0

Noninterest income 1,220.0 954.0 Noninterest expense 1,260.0 1,023.0 Loss provision 11.0 6.0 Net chargeoffs 4.0 (2.0) Balance Sheet 9/30/97 9/30/96 Assets $35,507.0 $28,445.0 Deposits 22,111.0 17,376.0 Loans 5,356.0 4,252.0 Reserve/nonp. loans 2,296.0% 878.0% Nonperf. loans/loans 0.06% 0.19% Nonperf. assets/assets 0.02% 0.03% Nonperf. assets/loans + OREO 0.15% 0.22% Leverage cap. ratio 6.10% 5.30% Tier 1 cap. ratio 13.30% 12.70% Tier 1+2 cap. ratio 13.40% 13.00%

Republic New York Corp. New York Dollar amounts in millions (except per share) Third Quarter 3Q97 3Q96 Net income $112.3 $107.7 Per share 1.95 1.80 ROA 0.76% 0.80% ROE 14.33% 15.59% Net interest margin 2.28% 2.47% Net interest income 256.8 246.5 Noninterest income 129.6 109.8 Noninterest expense 220.9 198.3 Loss provision 4.0 20.0 Net chargeoffs 3.3 9.0 Year to Date 1997 1996 Net income $333.0 $310.3 Per share 5.77 5.15 ROA 0.77% 0.80% ROE 14.76% 15.37% Net interest margin 2.35% 2.50% Net interest income 761.5 711.5 Noninterest income 381.0 326.2 Noninterest expense 649.6 578.5 Loss provision 12.0 28.0 Net chargeoffs 8.1 21.2 Balance Sheet 9/30/97 9/30/96 Assets $57,792.0 $50,602.0 Deposits 33,438.0 30,981.0 Loans 13,005.0 11,789.0 Reserve/nonp. loans 346.17% 312.92% Nonperf. loans/loans 0.72% 0.95% Nonperf. assets/assets 0.16% 0.19% Nonperf. assets/loans + OREO NA NA Leverage cap. ratio 5.75%* 5.26% Tier 1 cap. ratio 13.10%* 12.86% Tier 1+2 cap. ratio 21.90%* 22.03%* *Estimated

First Union Corp. Charlotte, N.C. Dollar amounts in millions (except per share) Third Quarter 3Q97 3Q96 Net income $505.0 $356.0 Per share 0.90 0.65 ROA 1.43% 1.32% ROE 19.78% 19.17% Net interest margin 4.36% 4.27% Net interest income 1,359.0 1,282.0 Noninterest income 764.0 598.0 Noninterest expense 1,178.0 1,078.0 Loss provision 155.0 105.0 Net chargeoffs 155.0 144.0 Year to Date 1997 1996 Net income $1,461.0 $1,031.0 Per share 2.60 1.85 ROA 1.41% 1.30% ROE 19.75% 18.81% Net interest margin 4.36% 4.21% Net interest income 4,019.0 3,808.0 Noninterest income 2,262.0 1,649.0 Noninterest expense 3,529.0 3,141.0 Loss provision 465.0 255.0 Net chargeoffs 460.0 394.0 Balance Sheet 9/30/97 9/30/96 Assets $143,904.0 $133,882.0 Deposits 91,690.0 91,444.0 Loans 94,904.0 92,520.0 Reserve/nonp. loans 224% 188% Nonperf. loans/loans 0.64% 0.79% Nonperf. assets/assets 0.49% 0.62% Nonperf. assets/loans + OREO 0.74% 0.89% Leverage cap. ratio 6.53%* 5.23% Tier 1 cap. ratio 8.21%* 6.38% Tier 1+2 cap. ratio 13.77%* 10.94%

*Estimated

Wachovia Corp. Winston-Salem, N.C. Dollar amounts in millions (except per share) Third Quarter 3Q97 3Q96 Net income $167.3 $164.6 Per share 1.03 0.97 ROA 1.43% 1.44% ROE 18.55% 18.13% Net interest margin 4.12% 4.03% Net interest income 423.2 398.5 Noninterest income 228.9 198.2 Noninterest expense 356.1 316.5 Loss provision 50.3 40.7 Net chargeoffs 50.3 40.7 Year to Date 1997 1996 Net income $496.0 $473.8 Per share 3.03 2.78 ROA 1.42% 1.40% ROE 18.28% 17.29% Net interest margin 4.12% 3.99% Net interest income 1,241.9 1,149.7 Noninterest income 664.1 581.4 Noninterest expense 1,035.0 934.8 Loss provision 148.1 102.5 Net chargeoffs 148.0 102.2 Balance Sheet 9/30/97 9/30/96 Assets $47,670.0 $47,483.0 Deposits 29,091.0 27,436.0 Loans 33,754.0 31,549.0 Reserve/nonp. loans 737% 668% Nonperf. loans/loans 0.16% 0.19% Nonperf. assets/assets 0.14% 0.16% Nonperf. assets/loans + OREO 0.20% 0.25% Leverage cap. ratio NA 8.01% Tier 1 cap. ratio 9.70%* 8.92% Tier 1+2 cap. ratio 13.00%* 12.84%

*Estimated ===

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