Union Planters Corp. reported record second-quarter earnings of $33.9 million, up 29% from $26.3 million in the 1994 quarter.

Analysts said the Memphis-based bank had clearly pulled out of last year's slump, which had been caused by merger-related charges.

"They have moved to a new plateau in levels of profitability," said Kay Lister of Keefe, Bruyette & Woods Inc. "It's a solid quarter for them."

Earnings per share of 75 cents were right in line with the consensus estimate. Return on assets reached 1.39% in the quarter; return on equity, 18.38%

Net earnings for the six months were $66.9 million, or $1.49 per share, compared with net earnings of $51.6 million, or $1.14 per share, for the same period of 1994.

Union Planters attributed its performance to an increase in both net interest and fee income, combined with flat expenses. "Each of our affiliate banks has worked hard to both improve productivity and increase market share," said chairman and CEO Benjamin W. Rawlins Jr.

Net interest income grew 3%, to $105 million, from $102 million in the year-ago quarter. The increase resulted from loan growth, a higher net interest margin, and a higher investment portfolio yield.

"They are benefiting from the restructuring of the securities portfolio they took last fall," Ms. Lister said. "They've had a pickup in their investment yields, which has helped now that rates have declined."

The yield on the investment portfolio was 6.87% for the second quarter, compared to 6.62% for the previous quarter and 5.71% in the 1994 quarter.

Union Planters' net interest margin reached 4.66%, an increase of 7 basis points from the first quarter.

The higher level of interest income from loans and investment securities was partially offset by an increase in the cost of interest-bearing liabilities, primarily deposits.

Union Planters, which has $9.7 billion of assets, also reported a 34% gain in fee income, to $37.5 million, from $28 million in last year's second quarter. Profits and commissions from the bank's Small Business Administration loan trading operation contributed to the surge.

The company's earnings suffered last year because of its acquisition of Mississippi-based Grenada Sunburst System Corp., which required numerous merger-related charges.

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