Dean Witter's Anthony Davis wasn't kidding when he called First Bank System's fourth-quarter profits "incredibly good." At a time when other banks are suffering margin squeeze from repeated interest rate hikes, Minneapolis-based First Bank System Inc. watched its loan yields leap 129 basis points to 8.77%.

As a result, First Bank's net interest margin rose 42 basis points to 5.42%. The $26 billion-asset bank also benefited from an asset shift away from mortgages and into commercial and consumer loans.

Meanwhile, Atlanta-based SunTrust Banks Inc. reported record fourth- quarter net income on the strength of accelerating loan growth, stable margins, a lower loan-loss provision, and an ongoing share repurchase program. For more information and results from First Empire State Corp. and Star Banc Corp., see page 5.

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