A high-octane economy in the Southeast helped boost second-quarter profits at several of the region's banking companies, though one company's rise stemmed largely from extraordinary gains.

At Memphis-based Union Planters, the country's 28th-largest bank, net income rose 33%, to $105.8 million. Earnings per share, at 71 cents met consensus estimates.

However, the increase included $5 million from the sale of adjustable- rate mortgage loans, $3.2 million from securities sales, and $2.4 million from the sale of the company's corporate trust business.

"They are still relying on unusual items," said William Katz, a bank analyst for Merrill Lynch Global Securities. "They need to work on the quality and quantity of their core earnings power."

Net interest income was up 2%, to $311.6 million. Non-interest income rose 18%, to $140.7 million.

Union Planters, with assets of $32.3 billion, has doubled in size over the last two years through acquisitions. The company is beginning to overcome the earnings damage from integrating those purchases, said Catherine Murray, an analyst at J.P. Morgan Securities.

At First American Corp. of Nashville net income more than doubled, to $57.3 million.

The $18.6 billion-asset company, which has agreed to be bought by Amsouth Bancorp of Birmingham, Ala., reported earnings per share of 63 cents per share, beating the consensus estimate by 2 cents.

Given the coming merger, it is not surprising that earnings were strong, said David Trone, a banking analyst with Credit Suisse First Boston. "They aren't spending more money," he said. Noninterest expenses slid 1%, to $187.7 million.

Noninterest income gained 1%, to $125.9 million, and average loans increased at an 8.5% annual rate from the first quarter. "There was good commercial and industrial loan growth, thanks to continued strong economic activity in the region," he said.

First Tennessee National Corp. notched a 16% jump in profits, to $61 million. Per-share earnings of 45 cents matched the consensus estimate.

"In general, strength in the commercial and mortgage banking business offset softness in the capital markets business," Ms. Murray said. "But revenue growth was lower than in recent quarters, as mortgage banking activity subsided."

Mortgage banking represents about 35% to 40% of the $18.6 billion-asset company's business. Mortgage banking fee income soared 43%, to $175.7 million. Overall fee income appreciated 34%, to $294.3 million.

Rising interest rates hurt capital markets revenue amid diminished demand by investors for bonds, Ms. Murray said.

Noninterest expenses increased 28%, largely because of rising employee compensation. Average loans increased 10% and credit quality "in general remained high," Ms. Murray said.

Compass Bancshares of Birmingham, Ala., reported net income of $53.7 million, a 13% rise. Earnings per share of 47 cents met Wall Street predictions.

"It was a very good quarter," Mr. Katz said. "There was good loan growth and excellent cost controls." Average loan growth was 18%, adjusting for the impact of branch purchases and securitizations.

Fee growth was also impressive, Mr. Trone said. Noninterest income rose 4%, to $58.3 million.

While Compass "joined the growing list of banks with higher nonperforming assets," credit quality is not a big problem, Mr. Trone said. Nonperforming assets at the $17.5 billion-asset company rose to $58.1 million, from $41.2 million.

Montgomery, Ala.-based Colonial BancGroup had a 13% earnings increase, to $30.3 million. Earnings per share of 27 cents at the $10.8 billion-asset banking company beat the consensus estimate by a penny.

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