Earnings at First of America Bank Corp. are on an upswing.

The $22 billion-asset bank, based in Kalamazoo, Mich., has typically reported lower-than-expected results, sluggish loan growth, and high expenses.

But last week, the company rocked analysts with quarterly net income of $73.2 million, or 82 cents per share, up 17.5% from a year earlier. Earnings per share beat analysts' consensus estimates by 6 cents and marked one of the biggest positive surprises among midsize banks.

"They have not been known as the bank with the most amount of religion when it comes to shareholder orientation," said Michael Mayo, an analyst at Credit Suisse First Boston, "but some of their recent actions suggest some conversion."

Specifically, the company has been in the midst of a two-year cost- cutting effort that included selling nearly 30 small-town branches in Michigan and Illinois. Last month, it announced it would sell its $1.1 billion-asset Florida bank to Barnett Banks Inc. for $160 million.

These moves should make First of America even more profitable, said analysts, who have been raising their earnings estimates. They credit Richard F. Chormann, who has been the company's chairman and chief executive officer for a little more than a year. Mr. Chormann "is doing a great job of refocusing the company on businesses where it should be," said analyst Joseph Roberto of Keefe, Bruyette & Woods Inc.

In the second quarter, First of America's noninterest income was up 15%, to $110 million, due to across-the-board gains, while noninterest expense was down 1% from a year earlier.

The company also said it sold a portion of its credit card portfolio in the second quarter, which earned it $1.2 million after taxes. It said it would sell another portion of its portfolio in the third quarter, which should yield a $6 million pretax gain.

First of America has been a rumored takeover candidate for several years. Mr. Roberto said he believes Mr. Chormann is trying to cut the company's costs and bulk up its revenue growth to get a higher price when the bank is eventually sold.

Another midsize regional, Mercantile Bancorp. of St. Louis, had a much different quarter. Mercantile said quarterly income of $32 million was less than half the $78 million reported in the same period a year earlier, largely because of after-tax merger charges that reduced income by $42 million. Operating income declined 4.4%, to $75 million. Earnings per share of 43 cents were 2 cents shy of analysts' consensus.

Analysts also noted that the third quarter would be difficult as the $22.6 billion-asset company digests two big acquisitions in St. Louis. Mercantile closed on a deal to buy $3.2 billion-asset Mark Twain Bancshares in April and completed its acquisition of $7.8 billion-asset Roosevelt Financial Group Inc. July 1.

Mercantile "had pretty good fundamentals," said Michael Ancell, an analyst at Edward Jones in St. Louis. "You're seeing the creation of a pretty good franchise."

Mercantile, like First of America, is considered a takeover target. Mr. Ancell said he believes Mercantile could attract the same type of attention received by Boatmen's Bancshares, which was bought in January by NationsBank Corp.

In other earnings news:

Chicago's Northern Trust Corp. had a strong quarter fueled by trust fees. The $26 billion-asset Northern Trust said income jumped 19%, to $75.4 million, or 65 cents per share, which beat analysts' consensus by 2 cents. Trust fees from corporate and institutional trusts were up 13%, to $87 million, while personal trust fees increased 12%, to $81 million. Northern Trust said its personal trust business benefited from "exceptionally strong" new business in the five midwestern states where it operates.

Marshall & Ilsley Corp. of Milwaukee said earnings grew 12%, to $57 million, or 58 cents per share. Marshall & Ilsley, with $15.4 billion of assets, said its data processing unit helped push fee income up.

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