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First Union announces record $140-million profit

First Union Corp. on Thursday announced record profits of $140-million for the third quarter. More than half was earned by its bank in Florida.

As an added bonus, First Union officials said the former Southeast Bank _ which First Union bought after it was seized by the government last fall _ added nearly $20-million to the quarter's gains.

That's well ahead of the profits First Union hoped for this year from what was once Miami's largest bank.

In all, the company said third-quarter earnings were up 107 percent from the $68-million in the same period a year ago. Earnings in the second quarter of 1992, a previous record, were $118-million.

Third-quarter earnings rose to $1.06 per common share from 61 cents a year ago and 90 cents in the second quarter of 1992.

First Union credited much of its strong showing to low interest rates, and its record performance is likely to be repeated by many of the nation's banks as they report their earnings in the coming weeks.

Banks have benefited by lowering their rates on deposits faster than they have lowered the rates they charge for loans.

"We are very optimistic about our fundamental trends and enthusiastic about the opportunities to enhance these trends resulting from our planned merger with Dominion Bankshares," said Edward E. Crutchfield Jr., First Union's chairman and chief executive officer. The company last month said it plans to buy Dominion, a Virginia-based bank with $8.9-billion in assets.

Based in Charlotte, N.C., First Union had $48.3-billion in assets on Sept. 30, which does not include Dominion or other pending acquisitions.

The bank also said its non-performing assets fell for the fourth straight quarter to $995-million, compared with $1.266-billion on Sept. 30, 1991.

About 60 percent of the bank's problem assets, $594-million, are in Florida and were largely flat in the quarter.

Jack Mitchell, president of First Union National Bank of Florida in Jacksonville, said problem loans should start to drop in the state. He predicted they will be down significantly by early 1994.