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First Union profit in line
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January 14, 2000: 8:37 a.m. ET
Bank's 4Q earnings down 14% on merger expenses, but meet forecasts
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NEW YORK (CNNfn) - First Union Corp. posted a double-digit drop in net income during the fourth quarter, but still managed to match analysts' expectations due to strong growth in fee income.
The Charlotte, N.C.-based bank reported operating earnings of $846 million, or 86 cents per share, for the quarter ended Dec. 31. That matched the consensus analysts' estimate compiled by First Call Corp. but was down sharply from the $993 million, or $1.00 per share, of the year-ago period.
The profit drop came as First Union struggles with higher expenses related to several acquisitions made over the past year. The company warned in May those expenses would drag down its bottom line during 1999.
But the bank continues to see strong revenue growth, particularly in fee income, which grew more than 36 percent to $4.1 billion in 1999 and now accounts for just under half of its total profit stream.
For the full year, First Union earned $3.3 billion, or $3.40 per share, excluding one-time gains from the sale of its interest in Electronic Payment Services Inc. Earnings totaled $3.77 per share during 1998.
First Union (FTU) shares rose 7/8 Thursday to close at 34. 
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First Union Corp.
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