Two midsize southeastern regionals posted second-quarter earnings Wednesday that met analyst expectations. First Tennessee National Corp. earned $35.6 million, up 38% from the year-ago quarter, and Deposit Guaranty Corp. netted $15.7 million, down 26%.
First Tennessee's increase was driven by strong fee income and lower credit costs. Its net of$1.12 a share matched consensus estimates as compiled by First Call.
Deposit Guaranty's decline did not reflect any problem with core earningS, but simply the fact that the Jackson, Miss.-based bank took a lower loan-loss provision than it did in the year-ago quarter.
First Tennessee's results were complicated by its decision to fund a new charitable foundation through securities gains. The bank used $7.6 million for the transaction, which produced $8.5 million in noninterest expense and $3.1 million in tax benefits.
First Tennessee's noninterest income was up t8% from the year-ago quarter. But bond division revenues dropped 6.5%.
"The loan recovery that's showing up in the Federal Reserve statistics is certainly showing up at every bank in the South, including First Tennessee," said J.C. Bradford & Co.'s Henry J. Coffey Jr. -- Kenneth Cline
