It's tough to complain with the first-quarter results that Income Investor selection AmSouth Bancorp (NYSE:ASO) released on Tuesday. Nothing in there will knock your socks off, but not much was expected of AmSouth -- or any bank this quarter -- because of the flat yield curve.
For the quarter, return on equity, return on assets, and the company's efficiency ratio all came in similar to the last few quarters -- at 20.5%, 1.39%, and 52.5%, respectively. Earnings increased 4% to $0.52 per share, from $0.50 per share last year, but more importantly (as far as trends go), the company's net interest income increased 4.7% over last year and its net interest income margin increased five basis points versus last quarter.
On the balance sheet, loan growth was up 9.4% and non-interest bearing deposit growth was up 10.1%. The majority of the company's loan growth is focused on single and multi-family residential units and retail development. On the company's conference call, management mentioned that it has intentionally kept a small exposure to hotel and office projects, which are more cyclical in nature. More loan growth remains likely, since the company will continue to channel funds from its investment portfolio into loans, where it sees greater growth potential.
I'm impressed with AmSouth's performance, and I'm a little bit more optimistic about the performance that BB&T (NYSE:BBT) will report on Thursday. Other banks worth checking out include SunTrust Banks (NYSE:STI) and Regions Financial (NYSE:RF). At first glance neither seems to have similar levels of performance (you can catch Stephen Simpson's coverage of Regions here), but I think both should at least be looked at in comparison to AmSouth.
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AmSouth Bancorp is a Motley Fool Income Investor recommendation.
Nathan Parmelee owns shares in BB&T, but has no financial interest in any of the other companies mentioned. The Motley Fool has an ironclad disclosure policy.
