Healthier local economies boosted loan volume and helped push up third- quarter earnings at many large regional banks. On this score, St. Louis- based Boatmen's Bancshares proved to be no exception.

Profits at the $33 billion-asset company increased 8.5% to $110.6 million, mostly due to higher net interest and noninterest income.

Return on assets reached 1.34%, up five basis points from the same time a year ago, while return on equity dropped to 15.77% from 16.03%.

A 12-basis-point drop in the net interest margin, to 4.21%, reflected higher funding costs, offset in part by higher yields on loans and investment securities, the bank said.

Net interest income was up 2% to $304.9 million, while noninterest income was up 12% to $167.7 million.

Like other banks, Boatmen's benefited from the cut in Federal Deposit Insurance Corp. premiums. But that was offset by noninterest expenses of $291.5 million, up 2%.

***

When CoreStates Financial Corp. of Philadelphia announced earlier this month that it planned to merge with Reading, Pa.-based Meridian Bancorp, it also reported third-quarter earnings of $134 million, up 29%. Last week, CoreStates released more details about its performance.

The $29 billion-asset bank holding company attributed its improvement to "broad strength" in its core banking business, a 5% increase in net interest income, modest growth in service fees, and a decrease of more than 6% in expenses.

The bank is particularly proud of its cost-reduction program, dubbed Best, which saved $20.5 million during the quarter, more than double projections.

CoreStates credited the program with a 7% decline in personnel expenses.

Meridian, meanwhile, earned $54.4 million in the quarter, a 48% gain. Like CoreStates, it reported preliminary results when the merger was announced Oct. 10.

The $14.6 billion-asset bank benefited from a six-basis-point gain in its net interest margin and an 8% jump in loan volume. In keeping with the trend at other large banks, Meridian's loan-loss provision was up nearly 62% to $10.5 million. However, nonperforming loans were down $10.5 million to $89.5 million.

***

Earnings at Cincinnati-based Fifth Third Bancorp jumped 20% to $75.2 million, helped by acquisitions in Ohio, Florida, and northern Kentucky. Per-share profits leaped 15.3% to $1.13.

Total assets increased by $2.9 billion to $17.2 billion. Return on average equity hit 18.4%, up 40 basis points, while return on assets reached 1.80%, a 1.8% gain.

Like other banks, Fifth Third enjoyed respectable growth in its loans and leases. Consumer leases were up 32%, installment loans were up 22% and commercial loans jumped 17%.

***

First of America Bank Corp., Kalamazoo, Mich., reported third-quarter net income of $66.7 million, an 18.3% increase. The bank said noninterest income growth, a reduction in the premium it paid to the FDIC, and lower operating costs offset the impact of a lower net interest margin.

Noninterest income jumped nearly 30% to $92.2 million on a 10% gain in service charges. The net interest margin dropped 18 basis points, due to the securitization of $500 million in credit card receivables.

***

Columbus, Ohio-based Huntington Bancshares earned $65.9 million for the quarter, up 18%. Chairman and chief executive Frank Wobst said the results benefited from solid loan growth and lower non-interest expenses.

Total loans increased 13.2% to $13.5 million. Noninterest expenses dropped 8.3% to $138.9 million.

Huntington did not use the cut in the FDIC premium to help its earnings for the quarter. Instead, it said it would save the money for future costs likely to be assessed to cover the Savings Association Insurance Fund.

***

Third-quarter net income at Midlantic Corp., Edison, N.J., fell 20% to $61 million, due to $54 million in tax benefits accrued in the third period 1994.

Net interest income increased by $10 million to $162 million and the net interest margin gained 44 basis points to hit 5.33%.

Midlantic agreed earlier this year to merge with PNC Bank Corp. to create a combined company with $78 billion. The transaction is expected to close by the end of this year.

***

Chicago-based Northern Trust Corp. reported $58.1 million in profits for the third quarter, a 21% jump.

Trust fees from corporate and institutional services grew 8% to $64.8 million. Total trust assets increased 18% to $585.4 billion.

William A. Osborn, Northern Trust's chairman and chief executive, said that total operating expenses declined from the first and second quarters of 1995, "demonstrating that Northern Trust's expense management program is working effectively."

***

Mercantile Bancorp., St. Louis, said it earned $56.7 million in the third quarter, up 18%.

"Continued loan growth and strong expense management while successfully integrating three acquisitions led to Mercantile's strong performance this quarter," said Thomas H. Jacobsen, the bank's chairman and chief executive.

A drop in both net interest income, down nearly $6 million to $145.6 million, and the net interest margin, which fell 56 basis points to $4.06%, was attributed by the bank to more competitive pricing for both loans and deposits.

***

UJB Financial Corp. of Princeton, N.J. reported a 14% gain in third- quarter net income to $44 million. T. Joseph Semrod, chairman and chief executive of the $15 billion-asset bank, said the growth was spurred by a jump in consumer loans.

Total loans at period-end were $10.2 billion, up 6.5%. Mortgage loans reached $3.2 billion, a 16.5% rise partially due to the acquisition of Bancorp New Jersey in July. Installment loans increased 10.3% to $2.4 billion.

***

Profits at Integra Financial Corp. fell 4% to $39.8 million due to a one-time $10.5 million charge to cover an expected assessment to cover Savings and Insurance Fund costs.

Integra, like other banks, did receive a $5.3 million rebate because of the premium cut by the FDIC, but it only partially offset the thrift fund charges.

In August, Integra agreed to be bought by National City Corp. of Cleveland. The transaction is expected to close in the second quarter.

***

Boston-based BayBanks Inc. posted a 20% gain in third-quarter net income to $34.7 million. The results were partially aided by the July acquisition of NFS Financial Corp. of New Hampshire.

The $11.5 billion-asset bank enjoyed a gain of 4 cents per share from the cut in the FDIC premium.

The acquisition of NFS added $458 million in loans, bringing total loans to $7.5 million at Sept. 30.

***

Nashville's First American Corp. boosted earnings by 17% in the third quarter, to $26.5 million, helped by trends that have been seen at banks across the country this reporting season: strong growth in loans and fee income combined with tight expense controls

Average loans at First American, which has $8.4 billion of assets, were up 17% from the year-ago quarter, with gains coming from both the commercial and consumer categories. The loan influx helped boost net interest income by 6% to $73.2 million.

Noninterest income surged 12% to $26.4 million while noninterest expense held steady at $57.8 million, compared to $57.2 million in the year-ago period.

"They're inwardly concentrated at the bank on trying to fight the efficiency battle as well as build market share right within their existing franchise," said analyst Henry J. Coffey Jr., with J.C. Bradford & Co.

***

Earnings comparisons at Atlanta-based Bank South Corp. were distorted by charges related to its pending acquisition by NationsBank Corp.

Bank South, which has $7.7 billion of assets, earned $21.1 million in the quarter, or 35 cents a share, compared with $21.7 million a year earlier. Merger-related charges of 6 cents a share were partially offset by 5 cents a share of tax benefits received in the third quarter of 1994.

Kenneth Cline contributed to this report.

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