Shares of Union Planters Corp. fell $3.3125, to $42, Friday after a disappointing first-quarter report.

After trading closed Thursday, the Memphis banking company reported net earnings had slipped 6.8%, to $97.4 million.

Results were hurt "by the integration of recent acquisitions and the implementation of a number of operational changes," said Benjamin W. Rawlins Jr., the company's chairman.

As the year progresses, "we expect profitability ratios to improve and to report higher earnings per share," Mr. Rawlins said.

But the report left analysts wary.

"Sluggish core revenue growth, as well as well as higher-than-expected expenses, contributed to the earnings shortfall," said William Katz, a banking analyst at Merrill Lynch & Co.

Mr. Katz said he sees "earnings growth improving in subsequent quarters but from a lower revenue base."

Michael Mayo, a banking analyst at Credit Suisse First Boston, said Union Planters "continues to be distracted by the perpetual integration of acquired banks."

He reduced his 1999 earnings estimate by 35 cents, to $3 a share, and his 2000 estimate by 55 cents, to $3.20.

"We believe the burden is on management to show the benefits of its aggressive acquisitions campaign," Mr. Mayo said.

Meanwhile, shares of J.P. Morgan & Co. rose 56.25 cents, to $133.0625, after analysts raised their earnings projections.

Ronald I. Mandle, a banking analyst at Sanford C. Bernstein & Co., said the vigor that Morgan demonstrated in the first quarter is likely to carry through the year.

"Much of the improvement in trading revenue they enjoyed is sustainable," he said.

He also predicted continued strength from the banking company's mergers and acquisitions operation, especially business from cross-border mergers, and said efforts at improving productivity are showing progress.

He raised his 1999 earnings estimate by $2.65, to $10.15, and his estimate for 2000 by $2.35, to $10.95.

Carla D'Arista, a banking analyst at Friedman Billings Ramsey & Co., said Morgan is "uniquely capable of servicing a high-end clientele with its risk management expertise."

She raised her 1999 earnings estimate by $2.08, to $9 per share, and her 2000 estimate by $2.29, to $10. +++

Union Planters Corp.

Memphis, Tenn.

Dollar amounts in millions (except per share) First Quarter 1Q99 1Q98

Net income $94.4 $104.5

Per share 0.67 0.74

ROA 1.22% 1.41%

ROE 13.39% 14.87%

Net interest margin 4.22% 4.59%

Net interest income 305.1 312.0

Noninterest income 126.3 126.8

Noninterest expense 258.2 237.0

Loss provision 16.3 33.2

Net chargeoffs 14.2 26.9

Balance Sheet 3/31/99 3/31/98

Assets $33,669.2 $30,422.2

Deposits 26,461.7 23,146.9

Loans 20,504.9 20,261.6

Reserve/nonp. loans 197% 224%

Nonperf. loans/loans 0.88% 0.78%

Nonperf. assets/assets 0.61% 0.62%

Nonperf. assets/loans + OREO 1.02% 0.99%

Leverage cap. ratio 7.83% 9.71%

Tier 1 cap. ratio NA NA

Tier 1+2 cap. ratio NA NA ===

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