Led by Freddie Mac, a contingent of financial companies reported solid earnings increases yesterday but failed to impress investors, whose concerns about future interest rates helped push bank stocks downward. The McLean-based mortgage company's earnings for the three months ending Dec. 31 were $594 million, or 79 cents per share, a 27 percent gain over the $468 million (62 cents) earned in the last three months of 1998.

"Freddie Mac had another very good quarter and has largely been unappreciated by the stock market today," said David Hochstim, an analyst with Bear, Stearns & Co. in New York. Investors displayed a "a knee-jerk reaction to higher interest rates and a perpetuation of the trend . . . that financial stocks don't perform well when rates go up."

The company reported net income of $2.2 billion for all of 1999, or $2.96 per share, an increase of 31 percent over 1998 results of $1.7 billion ($2.31).

Legg Mason Inc. of Baltimore reported revenue of $342.7 million for the third quarter of its fiscal year, up 32 percent over the $260.5 million posted during the previous year's third quarter.

The investment firm's net income totaled $33.3 million for the three months ended Dec. 31, or 55 cents per share. That was up 82 percent over the $18.3 million in net income (32 cents) for the same portion of 1998.

The company attributed the record high revenue and earnings figures in part to a 43 percent increase in investment advisory revenue.

Bank of America Corp. reported net income of $1.9 billion for the fourth quarter of 1999, up 64 percent from net income of $1.2 billion for the same portion of 1998.

Earnings per share for the three months ended Dec. 31 were $1.10, meeting analysts' expectations and nearly doubling the 66 cents per share reported during the previous year's fourth quarter.

The Charlotte-based bank reported an after-tax charge of $213 million related to the merger with NationsBank. Excluding that cost, operating net income for the quarter would have been $2.1 billion, or $1.23 per diluted share.

For all of 1999, Bank of America posted net income of $7.9 billion, or $4.48 a share, compared with $5.2 billion and $2.90 a share for 1998.

First Virginia Banks Inc. of Falls Church reported net income of $34.7 million, or 70 cents per share, for the fourth quarter of 1999, up slightly from the $34.2 million (68 cents) reported during the same portion of 1998. Non-interest income declined to $27.6 million for the three months ended Dec. 31 from $32.2 million the year before, but the 1998 figure included one-time gains, the company said.

For the year, First Virginia reported record net income of $150.9 million, or $3 per share, compared with $130.2 million ($2.53) in 1998.

Capital One Financial Corp. of Falls Church said it logged earnings of $97.9 million for the fourth quarter of 1999, up 35 percent from the $72.7 million reported for the final three months of 1998. That translated to 47 cents per share for the last quarter of 1999, up from 35 cents per share the year before.

Earnings of $363.1 million ($1.72) for all of 1999 were a record, the company said. Yearly earnings for 1998 were $275.2 million ($1.32).