Press Releases

Charlotte, N.C. -- First Union Corporation's earnings were $471 million in the first quarter of 1997, a 12 percent increase from operating earnings of $420 million before merger-related restructuring charges in the first quarter of 1996. On a per common share basis, earnings were $1.67, an 11 percent increase from operating earnings of $1.50 in the first quarter of 1996. The first quarter 1997 earnings represented a return on common equity of 19.58 percent and a return on assets of 1.42 percent. "Our fee-based businesses continue to provide excellent growth," said Edward E. Crutchfield, chairman and chief executive officer. "We are especially pleased with 67 percent fee income growth from last year in our Capital Markets Group, which provides a variety of sophisticated financing products and services primarily to our middle-market customer base. Our Capital Management Group, which increased fee income 61 percent from last year, also continues to expand with broad and balanced products for customers throughout the needs and stages of their lives. Considering demographic trends, our entry into new markets and the fact that we are now widely advertising our products, we expect strong sales momentum going forward." Key factors in the first quarter of 1997 compared with the first quarter of 1996 included:

• 5 percent growth in tax-equivalent net interest income;
• 47 percent growth in noninterest, or fee, income (excluding securities transactions); and
• Good expense control, with an efficiency ratio of 56.81 percent, compared with 57.36 percent (excluding merger-related restructuring charges) in the first quarter of 1996.

Also included in the first quarter of 1997 were three purchase acquisitions that closed in the fourth quarter of 1996. Tax-equivalent net interest income in the first quarter of 1997 was $1.3 billion, compared with $1.2 billion in the first quarter of 1996.

First Union's strategic decision to allocate more resources to lines of business that produce fee income-earnings streams was apparent in the increase in noninterest, or fee, income to $753 million in the first quarter of 1997 compared with $526 million in the first quarter of 1996. Average net loans increased 6 percent to $94.6 billion, compared with $89.3 billion in the first quarter of 1996. Loan growth came primarily from First Union's Specialized Industry Group in Capital Markets and from the purchase acquisitions. Nonperforming assets were $778 million, or 0.81 percent of net loans and foreclosed properties, compared with $842 million, or 0.93 percent of net loans and foreclosed properties, at March 31, 1996. Annualized net charge-offs were 0.61 percent in the first quarter of 1997, compared with 0.66 percent in the first quarter of 1996. Net charge-offs, excluding credit card-related charge-offs, were 0.20 percent in the first quarter of 1997, compared with 0.45 percent in the first quarter of 1996. At the end of the first quarter of 1997, First Union had 280 million shares of common stock outstanding, compared with 287 million shares at year-end 1996. First Union repurchased 9.9 million shares of common stock in the first quarter of 1997. At March 31, 1997, First Union (NYSE: FTU) had assets of $137 billion. Total stockholders' equity was $9.5 billion. The company operates full-service banking offices in Connecticut, Delaware, Florida, Georgia, Maryland, New Jersey, New York, North Carolina, Pennsylvania, Virginia, South Carolina, Tennessee and Washington, D.C.

-- END --