The big story for southeastern banks in the first quarter was what did not happen.

The issue of credit quality, a big concern for analysts at yearend, showed up only in slightly higher chargeoff rates and loan-loss provisions.

Meanwhile, loan growth and fee income remained strong, and most banks also did a good job of controlling expenses.

"Particularly considering the skepticism, it was a good quarter," said R. Harold Schroeder, an analyst with Keefe, Bruyette & Woods Inc. "There wasn't a lot of bad news in the story this quarter. There weren't blockbuster performances, just good, solid performances all around."

David West, with Richmond, Va.-based Davenport & Co., said earnings at the banks he covered came in "generally at or slightly above expectations." Mr. West cited improved interest rate margins, compared with the fourth quarter, as a major contributor to earnings strength in the first quarter.

"That was clearly driven by lower cost of funds," Mr. West said. "That has been one of the pleasant surprises of the quarter."

Among midtier regional banks reporting in the last two weeks, SouthTrust Corp., Birmingham, Ala., earned $57.4 million, representing a 23% gain from the year-ago period. SouthTrust, which has $22.6 billion of assets, cited a 29% increase in loans.

Southern National Corp., Winston-Salem, N.C., earned $69.6 million, compared with a $12.3 million loss a year ago, when the company took heavy merger-related charges. Southern National, with $20.2 billion of assets, said good fee income and a strong net interest margin helped it achieve a 1.40% return on assets and a 17.86% return on equity.

Richmond-based Crestar Financial Corp. reported net income of $55.4 million, up 12% from the year-before quarter. Crestar's margin improved eight basis points from yearend, and noninterest income - including $2.4 million in securities gains - jumped 7% to $77.7 million. Crestar has $17.9 billion of assets.

Fee income also helped First Tennessee National Corp., Memphis, earn $37.4 million, up 8% from last year's first quarter. First Tennessee, with $12.8 billion of assets, cited a 20% gain in noninterest income, to $136.6 million, driven by record bond division revenues and strong growth in mortgage banking.

Central Fidelity Banks Inc. of Richmond, which has $10.5 billion of assets, earned $28 million, representing a 9% gain from the year-ago quarter. The bank said an improving net interest margin, fee income growth, and effective cost control contributed to its results.

Nashville-based First American Corp. reported $29.8 million of net income, up 18% from the first quarter of 1995. First American, which has $9.9 billion of assets, said annualized loan growth of 14%, excluding acquisitions, and an improved net interest margin boosted its bottom line.

New Orleans-based First Commerce Corp. reported its long-awaited "clean quarter," with net income of $31.5 million, up 118% from the year-ago period. Quarterly earnings at First Commerce, which has $8.2 billion of assets, had been dogged by various nonrecurring charges throughout last year. But good consumer loan growth finally came through on the bottom line in this year's first quarter.

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