Reynolds Metals Co., Virginia's largest industrial corporation, yesterday reported a decline in second-quarter profits and attributed it to weak demand for aluminum products as well as the closing of unprofitable subsidiaries. First-half earnings were at record levels, the Richmond firm announced.
United Virginia Bankshares Inc., meanwhile, reported a modest gain in profits during the recent three months. The state's largest banking business listed a more substantial gain in earnings for the first half of the year.
Suburban Bancorporation, parent firm of Suburban Trust Co., in Hyattsville, said its profits declined by 5 cents a share in the recent quarter. The small gain by United Virginia and the decline at Suburban contrast with strong quarterly increases reported to date by most large bank firms.
Profits of Reynolds dipped to $58.1 million ($3.02 a share) from $59.4 million ($3.12) in the same period a year ago as sales rose to $957 million from $874 million aluminum shipments declined to 351,800 tons from 353,700 tons.
The recent quarter's results include a one-time charge against earnings of 19 cents a share, reflecting the closing of unprofitable distribution and retail units that were operated by Reynolds' architectural and buildings products division.
In the first six months of 1980, Reynolds earned $110.2 million ($5.72) vs. $97.7 million ($5.12) a year earlier as sales increased to $1.83 billion from $1.65 billion.
Chairman David Reynolds said yesterday that aluminum shipments in the second half "are expected to be down compared with last year's and we are facing greater cost pressures on margins. United Virginia, a Richmond-based bank holding company with offices throughout the state, said second-quarter operating profits rose 8 percent to $8.4 million ($1.56 a share) from $7.8 million ($1.45) a year ago. Six-month profits from operations rose 18 percent to $16.3 million ($3.04) from $13.8 million ($2.55).
"Contributing to second-quarter results were higher loans outstanding compared with the same period a year ago and good net interest margins," commented UVB Chairman Joseph Jennings. At the same time, Jennings noted that loan demand had slackened in June from the pace earlier in the quarter along with the prime rate, both indicative of a receding economy.
Assets on June 30 were $3.33 billion, up 8 percent from last year. Loan volume average $2.22 billion in the quarter, an increase of 16 percent.
Suburban said second-quarter operating profits fell to $4.27 million (90 cents) from $4.45 million (95 cents). Six-month operating profits also declined to $8.25 million ($1.74) million ($1.79).
Chairman Robert Tardio attributed the decline to a slower rate of growth in net interest income, higher operating expenses and economic undertainty. Money set aside for possible loan losses was boosted by $781,000 to $1.8 million. Loan volume rose 4.5 percent to $904 million at Suburban, whose main subsidiary, Suburban Trust, is the largest bank in the Maryland suburbs of D.C.