Two Alabama-based banks, Regions Financial Corp. and Compass Bancshares, ended 1994 with record quarterly and full year earnings, despite heavy acquisition activity.

Meanwhile, Atlanta-based Bank South Corp. reported net income of $19.4 million in the fourth quarter, down 33%. The reason for the shortfall: a one-time after-tax gain of $19.8 million from the sale of Bank South's Pensacola, Fla., bank in the fourth quarter of 1993.

"Regions and Compass bought strong, profitable, smaller institutions, none of which posed serious risk to the core earnings of the companies," said analyst Peter Tuz, with Morgan Keegan Inc.

Birmingham-based Regions earned $37.2 million for the quarter, up 33%. Regions' earnings per share of 88 cents were just 1 cent shy of consensus estimates.

For the full year, Regions earned $146 million, or $3.40 a share, representing a 30% gain from 1993. But profitability ratios at the $12.8 billion-asset company did slip.

Assistant comptroller Ronald C. Jackson attributed much of this to pressure on the net interest margin, which fell 13 basis points.

Compass, also based in Birmingham, reported fourth-quarter net income of $26.5 million, up 19% from the year-ago quarter. Compass' earnings per share of 71 cents beat consensus estimates by one cent a share.

For the full year, $9.1 billion-asset Compass earned $99.7 million, or $2.68 a share, an 11% gain. Compass' return on assets slipped slightly but return on equity jumped to 17.35%.

Regions completed nine acquisitions during 1994, while Compass completed its largest-ever deal in the fourth quarter.

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