Recovery in Virginia is slow to reach banks.

VIRGINIA'S ECONOMY, WHICH suffered more from the recession than those of most other states, is on the mend. But bankers and economists are not anticipating a return to the roaring 1980s, when the state grew faster than the national average.

"Given the construction overhang that we still have, and the uncertainties related to defense, we would expect the [state] economy to grow at about the national rate over the next couple of years," said Christine Chmura, an economist at Crestar Financial Corp. in Richmond.

Much of the state's economy is closely tied to the defense industry. The contraction in defense spending has already affected the state's Newport News shipyards, where job cuts in the first quarter contributed to a 0.9% overall employment drop in Virginia's manufacturing sector.

Over the weekend, that state learned that three small naval facilities in the Norfolk area would be closed, for a loss of 7,000 jobs. It is possible that the state still may achieve a small net gain of defense jobs, if personnel from other parts of the country are transferred there, said Ms. Chmura.

Between 1990 and 1991, total employment in Virginia plunged 3.3% versus 2.0% for the entire nation, Ms. Chmura said. However, Virginia recorded 0.4% employment growth last year, a little better than the national economy's gain of 0.1%, according to the Federal Reserve Bank of Richmond.

The improvement accelerated in the first quarter, when Virginia's employment rate grew 1.1% compared with 0.9% for the nation.

William F. Shumadine, president of Richmond's Central Fidelity Bank, said consumer lending in Virginia has been "steadily positive" in the past year. Middle-market lending, he added, is showing signs of life.

Virginia banks as a group, however, are still suffering. The state's 170 banks managed to reduce their nonperforming loans by 33% in 1992 to $1.1 billion, or 2.67% of gross loans. But they also returned a weak 0.73% on average assets compared with an average of 0.93% for all U.S. banks, according to Sheshunoff Information Services Inc.

Most state bankers are optimistic, however.

"We've clearly touched bottom and are on the way back up," said Mark P. Vitner, a vice president and economist with Charlotte, N.C.-based First Union Corp., which recently bought two major Virginia banks.

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