SunTrust Banks Inc.'s fourth-quarter earnings rose 9%, thanks to solid loan growth and a double-digit jump in fee income.

The Atlanta-based banking company, the nation's 19th largest, reported fourth-quarter net income of $158.5 million, or 72 cents a share, from $144.9 million, or 64 cents, a year earlier.

Meanwhile, Minneapolis-based First Bank System reported a quarterly earnings jump of 14%, due largely to cost cutting and increased business through acquisitions.

Fourth-quarter net income at First Bank, the nation's 25th-largest banking company, rose to $171.4 million, or $1.24 a share, from $150.7 million, or $1.12, a year earlier.

The earnings results for the two institutions, the first posted this quarter by any of the nation's top 25 banks, were generally consistent with Wall Street estimates. They also suggest that the industry is continuing to build on its earnings juggernaut.

"Growth among the big regional banks is consistent, said Christopher W. Marinac, an analyst with Interstate/Johnson Lane. "The loan accounts are going up, not down."

For all of 1996, SunTrust reported $616.6 million in net income, or $2.76 per share, a gain of 9%, or 29 cents per share, in the previous year.

"It looks like a really good quarter. It's classic SunTrust," said Darren Short, a banking analyst with Robinson-Humphrey Co.

James C. Armstrong, first vice president for investor relations with SunTrust, pointed to loan growth of 13% as the key element to the healthy earnings. But the $49.6 billion-asset bank's success in boosting noninterest income is significant, he said.

"Certainly our noninterest income growth was good, and it is an indication that there is some payoff," he said.

The company has spent the last two years investing in a growth initiative aimed at boosting revenues in six key product areas. They include mortgage production and corporate and commercial business as well as trust and retail banking. The investment appears to be paying off.

For the year, SunTrust showed income gains of 52% in its corporate and institutional investment income; 47% in its retail investment income; and 25% in other charges and fees. In all, total noninterest income grew from $713.1 million in 1995 to $818 million in 1996.

For the fourth-quarter alone, total noninterest income, excluding securities losses, was up 11.1% over the same period in 1995.

"Fee income was very strong," said Mr. Short. "That has been a big push for them. It's been an across-the-board ramp-up. They've invested pretty heavily, and it tends to manifest itself in nearly every category."

As for First Bank, the $36.5 billion-asset company said two first- quarter 1996 acquisitions - Firstier Financial Inc., a $3.6 billion-asset Omaha bank company, and BankAmerica Corp.'s corporate trust business - helped boost fee income and net interest income in the fourth quarter.

First Bank's results represent a trend among regional banks that are facing slowing revenue growth. First Bank has become extremely adept at growing its customer base through acquisitions and by tight-fisted cost control. That's important, say analysts, because they predict a slowdown in revenue growth among all banks.

"Internal growth at First Bank is like the rest of the industry," said Catherine Murray, an analyst with J.P. Morgan Securities Inc., "which continues to be affected by a generally slowing economic environment and very effective nonbank competitors."

Ms. Murray said she expects banks to meet analysts' expectations this quarter, but many may be making those projections through cost cutting, rather than strong revenue growth. That's been the story at First Bank, which has gained a "strategic advantage" over other banks because of its miserly methodology, Ms. Murray said.

First Bank said noninterest income was up 12.5% over a year ago to $222 million. The fee income was boosted primarily from growth in credit card and trust fees, a result of the Firstier and BankAmerica acquisitions.

For all of 1996, First Bank's net income was $739.8 million, up 30% from 1995. Earnings per share rose 27.7% for the year to $5.25.

This story was written by John Kimelman, with contributions by from Brett Chase and Carey Gillam. +++

First Bank System, Inc. Minneapolis, Minn. Dollar amounts in millions (except per share) Fourth Quarter 4Q96 4Q95 Net income $171.4 $150.7 Per share 1.24 1.12 ROA 1.92% 1.80% ROE 22.10% 22.40% Net interest margin 4.92% 4.83% Net interest income 393.5 363.7 Noninterest income 222.0 197.3 Noninterest expense 302.0 287.3 Loss provision 35.0 31.0 Net chargeoffs 40.6 29.0 Year to Date 1996 1995 Net income $739.8 $568.1 Per share 5.25 4.11 ROA 1.88% 1.73% ROE 21.40% 21.30% Net interest margin 4.90% 4.91% Net interest income 1,555.9 1,454.0 Noninterest income 1,185.9 783.1 Noninterest expense 1,388.1 1,205.9 Loss provision 136.0 115.0 Net chargeoffs 152.8 121.0 Balance Sheet 12/31/96 12/31//95 Assets $36,489.0 $33,874.0 Deposits 24,379.0 22,514.0 Loans 27,128.0 26,400.0 Reserve/nonp. loans 429% 401% Nonperf. loans/loans 0.44% 0.45% Nonperf. assets/assets 0.38% 0.45% Nonperf. assets/loans + OREO 0.51% 0.58% Leverage cap. ratio 6.80% 6.10% Tier 1 cap. ratio 7.20% 6.50% Tier 1+2 cap. ratio 12.00% 11.00%

SunTrust Banks Inc. Atlanta Dollar amounts in millions (except per share) Fourth Quarter 4Q96 4Q95 Net income $158.5 $144.9 Per share 0.72 0.64 ROA 1.32% 1.34% ROE 18.91% 18.65% Net interest margin 4.29% 4.47% Net interest income 472.2 443.9 Noninterest income 207.0 179.0 Noninterest expense 399.1 380.6 Loss provision 34.7 31.3 Net chargeoffs 33.6 29.1 Year to Date 1996 1995 Net income $616.6 $565.5 Per share 2.76 2.47 ROA 1.35% 1.36% ROE 18.89% 18.53% Net interest margin 4.36% 4.49% Net interest income 1,824.3.0 1,726.0 Noninterest income 818.0 713.1 Noninterest expense 1,583.1 1,451.5 Loss provision 115.9 112.1 Net chargeoffs 90.2 66.6 Balance Sheet 12/31/96 12/31//95 Assets $52,468.0 $46,471.0 Deposits 36,890.0 33,183.0 Loans 35,404.0 31,301.0 Reserve/nonp. loans 342% 364% Nonperf. loans/loans 0.60% 0.61% Nonperf. assets/assets 0.49% 0.54% Nonperf. assets/loans + OREO 0.72% 0.80% Leverage cap. ratio N/A 6.70% Tier 1 cap. ratio N/A 7.78% Tier 1+2 cap. ratio N/A 9.71% ===

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