Strong Quarter for Southeast's Midsize Banks

Coming off a year that included a flurry of acquisitions, midsize southeastern banks turned in solid fourth-quarter earnings.

Consistent loan growth, strong credit quality, and improving profitability helped results at several regional companies.

Union Planters Corp. and Hibernia Corp.-along with Washington-based Riggs National Corp.-showed declines, primarily because of charges related to acquisitions and nonrecurring items related to loan loss reserves.

"As a whole, with the Southeast banks-and particularly that middle tier- you're seeing consolidated loan growth and solid credit quality," said R. Harold Schroeder, vice president with Keefe, Bruyette & Woods.

Birmingham, Ala.-based Regions Financial Corp., with $18.9 billion of assets, reported quarterly profits of $64.8 million, up 48%. Earnings equaled $1.04 per share, compared to 71 cents. The results met consensus estimates. The company reported $229.7 million in net income for the year, up 16%.

Regions spent most of 1996 buying smaller banks, expanding its presence in north Georgia, Florida, and Louisiana. In all, the company's asset size grew more than $2 billion from yearend 1995.

"Virtually all of these banks have been on the acquisition trail this year," said Mr. Schroeder. "The real trick for these guys, particularly in this middle group, is to see if they really make more out of these acquisitions and recover the prices they've paid for them."

Amsouth Bancorp., of Birmingham, Ala., reported fourth-quarter earnings of $51.6 billion, a 7.7% jump. The $18.4 billion-asset bank earned 92 cents per share, compared to 82 cents in the year-earlier period. Results beat consensus estimates by 2 cents. For the year, the company earned $182.7 million, up 4.4%.

The company was helped by strong growth in net interest income from both consumer and commercial loans as well as continued increases in noninterest revenues.

Union Planters Corp.'s recent buying spree took a bite out of its earnings, reducing the Memphis-based company's fourth-quarter net income to $11.4 million, a 68% drop.

The decline resulted from $66 million in merger and other charges that reduced earnings to 15 cents per share, from 53 cents in the fourth quarter of 1995. Excluding nonrecurring and special items, the company earned 77 cents a share, missing consensus estimates by 5 cents.

The $15.2 billion-asset company bought five financial institutions in the fourth quarter, bringing to 11 the total number of banks purchased in 1996.

The profit decline masked healthy fourth-quarter results, which included a 12% increase in net interest income and an 8% jump in noninterest income.

Richmond, Va.-based Central Fidelity Banks Inc. reported an 18% jump in fourth-quarter net income to $30.8 million. On a per share basis, the $10.5 billion-asset company earned 52 cents, compared to 44 cents a share in the same period in 1995. The results beat consensus estimates by 2 cents.

Yearend net income was $112.7 million, an increase of 7%.

"The fundamentals look really good at Central Fidelity," said Merril Ross, an analyst with Wheat First Butcher Singer.

For the quarter, net interest income increased 11% to $99.4 million, while noninterest income increased 11.2% to $23 million.

First American Corp., of Nashville reported a 37.8% jump in fourth- quarter earnings to $33.5 million. On a per share basis, earnings totaled $1.13, compared to 86 cents. It beat consensus estimates by a penny.

The $10.4 billion-asset company earned $121.6 million for the year, up 18%.

The company's emphasis on balance-sheet profitability resulted in an improved net interest margin of 4.06%, compared to a spread of 3.82% in the fourth quarter of 1995.

New Orleans-based Hibernia Corp., with $9.3 billion of assets, reported quarterly profits of $30.9 million, down 9%.

Per common share, net income was 23 cents, compared to 27 cents. The results hit consensus estimates exactly.

The decline resulted from a lower-than-normal federal income tax rate in 1995.

The company reported $110 million in net income for the year, down 15%.

Hibernia completed five mergers in 1996, including two in the fourth quarter.

Riggs also showed a decline in fourth-quarter net income.

The $5.1 billion-asset Washington company earned $11.6 million, down 10%.

Earnings amounted to 27 cents a share, compared to 34 cents. Results fell short of consensus estimates by 3 cents.

For the year, the company reported net income of $66.3 million, a 25% drop.

On an operating basis, fourth-quarter net interest income grew 4.8% to $39.4 million, and noninterest income grew 22.6% to $23.7 million.

Whitney Holding Corp., of New Orleans, reported $11.1 million in fourth- quarter net income, a 4% gain. Earnings per share equaled 61 cents, compared to 60 cents. Results were a penny short of consensus estimates.

For the year, the company reported net income of $40.6 million, down 11%.

The yearend results included $4.2 million in nonrecurring merger-related expenses associated with three pooling-of-interests deals.

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