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 RICHMOND, Va., Oct. 13 /PRNewswire/ -- Central Fidelity Banks, Inc. (NASDAQ-NMS: CFBS), reported record earnings for the third quarter and nine months ended Sept. 30, 1993. Net income for the third quarter was $26,741,000, an increase of 29.2 percent from the $20,696,000 reported in the third quarter of 1992. Net income per share for the quarter was 69 cents compared to 58 cents in the previous year's third quarter, representing an increase of 19.0 percent on higher average shares outstanding.
 Net income for the first nine months of 1993 was a record $77,185,000, or $2.00 per share, vs. $56,312,000, or $1.66 per share, during the comparable period in 1992, representing increases of 37.1 percent in net income and 20.5 percent in earnings per share.
 Total assets as of Sept. 30, 1993 were $9,105,843,000, an increase of 10.0 percent over the prior year. Total loans grew 16.0 percent to $4,410,813,000, while total deposits increased 5.0 percent to $6,642,316,000 at quarter-end. Shareholders' equity was $660,052,000, representing an increase of 13.4 percent from the third quarter 1992 level. The book value per common share increased 11.5 percent to $16.99 from $15.24 last year. The significant growth in loans resulted from continued strong demand for first mortgage real estate loans as well as accelerated growth of other consumer loan activity.
 Central Fidelity's return on average total assets for the third quarter was 1.19 percent, compared to 1.06 percent for the same period last year. The company's return on average shareholders' equity was 16.37 percent in the third quarter of 1993 vs. 15.45 percent for the comparable period in 1992.
 On a tax-equivalent basis, net interest income for the quarter ended Sept. 30, 1993, was $79,149,000, representing an increase of 2.1 percent from the same quarter of 1992. The net interest margin for the quarter was 3.71 percent, compared with 4.23 percent for the third quarter of 1992. The lower growth in net interest income and the decline in net interest margin during the quarter were caused by heavy prepayments on premium rate mortgage-backed securities which reduced spread income. In view of this trend, an additional expense of $6,000,000 was recognized through an adjustment of premium amortization on similar securities. This action will lessen the impact of prepayments of such securities in future periods. Excluding the adjustment of premium amortization, the net interest margin would have been 4.01 percent for the quarter.
 Non-interest income was $68,359,000 in the third quarter, compared with $43,760,000 for the third quarter of 1992. Gains of $50,680,000 were realized on the sale of $600,000,000 of corporate bonds to reduce future interest rate risk and enhance liquidity in anticipation of higher loan demand and sluggish growth in deposits. Excluding the effects of securities transactions during the comparable quarters, non- interest income increased 16.4 percent.
 Non-interest expense increased by $9,122,000, or 16.4 percent, to $64,637,000 during the quarter. The increase included $8,488,000 in higher expenses related to foreclosed properties than realized in the comparable quarter last year. Excluding credit-related expenses, non- interest expense increased 9.0 percent, primarily due to personnel and FDIC insurance costs.
 As of Sept. 30, 1993, the company reclassified its portfolio of investment securities from the investment category to Securities Available for Sale. This action was taken in anticipation of FASB Statement No. 115, a standard which will require companies to change the manner in which securities are accounted for and which will take effect as of year-end.
 Non-performing assets as of Sept. 30, 1993, were $135,194,000, or 1.48 percent of total assets, compared to $112,369,000, or 1.23 percent, at the end of the second quarter and $118,480,000, or 1.43 percent, at the same date last year. This increase in non-performing assets reflects the continued weakness in real estate sales and values primarily in the Northern Virginia markets and in preparation of conversion to a national bank charter of the company's principal subsidiary, Central Fidelity Bank. The primary regulator under the new charter will be the Office of the Comptroller of the Currency, and conversion is anticipated to be effective in the fourth quarter of this year.
 Net loan charge-offs for the quarter were $39,607,000, representing 3.68 percent of average loans on an annualized basis compared to $13,321,000, or 1.41 percent of average loans for the third quarter of 1992. For the nine months ended Sept. 30, 1993, net charge-offs were $70,941,000, or 2.29 percent of average loans compared to $41,768,000, or 1.51 percent of average loans for 1992. The allowance for loan losses at quarter-end was $105,000,000, or 2.38 percent of loans compared to $101,800,000, or 2.42 percent of loans at June 30, 1993, and $101,800,000, or 2.68 percent at Sept. 30, 1992.
 Commenting on the company's performance, Carroll L. Saine, chairman of the board, said: "Actions taken during the quarter were prudent and conservative, and effects of such actions on the company's continued financial soundness and earnings stability in future periods will be positive."
 Central Fidelity Banks, Inc., is a Richmond-based bank holding company with 230 branch office throughout the state.
 -0- 10/13/93
 /CONTACT: William F. Shumadine Jr., president, 804-697-6744, or Peggy Cummings, director of public relations, 804-697-7261, both of Central Fidelity Banks/

CO: Central Fidelity Banks, Inc. ST: Virginia IN: FIN SU: ERN

KD-MH -- DC021 -- 1709 10/13/93 13:05 EDT
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Publication:PR Newswire
Date:Oct 13, 1993

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