Fourth-quarter earnings dropped 14%, to $43 million, at Signet Banking Corp., the company said Tuesday.

Signet blamed restructuring charges related to the spinoff of its credit card unit.

The now-independent card unit, Capital One Financial Corp., reported Tuesday that its earnings fell 35% from the year-earlier quarter, to $26.5 million.

For the full year, earnings at Richmond, Va.-based Signet were down 14% to $149.8 million, from $174.4 million in 1993. Capital One, which is based in Falls Church, Va., earned $95.3 million, a 14% drop from $110.5 million the previous year.

The bottom line shortfall at both Signet and Capital One reflected heavy restructuring charges. In November, Signet sold off a 12% share of Capital One in a public offering, retaining 88% for itself.

Signet said Tuesday it would distribute that majority share to its own stockholders on Feb. 10, in the ratio of one Capital One share for each Signet share.

To accomplish the spinoff, Signet took restructuring and employee termination charges of $92.2 million during 1994, $9.6 million of that in the fourth quarter. Capital One took $32 million in after-tax 1994 charges, all of it in the third quarter.

Even with all the restructuring charges, Signet still managed to earn 1.31% on assets and 14.33% on equity in 1994. Signet earlier predicted it will boost ROE to 15% by this year's fourth quarter.

"I think we're right on target, and I'm very encouraged," said chairman and chief executive Robert M. Freeman.

Excluding the charges, earnings at Signet, which has $12.9 billion of assets, would have been up 2% for the quarter (to $49.1 million) and 20% for the year (to $210 million).

A key factor in Signet's strong core performance for the year was vigorous growth in its consumer portfolio, primarily card, installment, and student loans. The bank has been applying many of the information-based marketing strategies that proved so successful in the card unit to its other products, such as a $7,500 personal loan now being offered in targeted mailings around the country.

Credit quality was a high point of the quarter. Nonperforming assets fell 26% from the third quarter to $48.5 million, or 0.61% of loans and foreclosed properties, while the reserve now covers a whopping 846% of nonperforming loans.

But expenses were a bit on the high side. Noninterest expense surged 24% from the year-ago quarter, to $210.9 million - reflecting restructuring charges, higher credit card solicitation costs, and investment banking fees connected to the Capital One spinoff.

Excluding the restructuring charges, noninterest expense was still up 18%. "We are, in essence, spending every available dollar in support of the information-based strategies," Mr. Freeman said.

Chief financial officer Wallace B. Millner 3d said Signet would show better expense numbers this year.

Capital One, which has $7.4 billion in managed loans, demonstrated strong growth in the fourth quarter, partly due to seasonal factors. New accounts were up by 535,000, compared to 390,000 in the third quarter. Outstandings increased by $618 million compared to $442 million in the previous quarter.

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