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Southeast banks are down but far from out

Call them the bad-news banks. The spate of headlines from the last two weeks would lead a reader to think that a lot of banks are in line to go the way of savings and loans. Almost all of the banks in the Southeast had the third-quarter blues:

"Barnett profits tumble"

"Southeast reports loss"

"Bank earnings take beating"

"Loans sink NCNB earnings"

How long will it be before bank executives parade before Congress to explain how their banks failed and how the taxpayer has to bail them out?

Most of the banks in the Southeast are still in good shape, according to a sampling of bank analysts and experts.

And some of these observers believe banks in the region are better prepared now than they were when other economic downturns occurred.

It takes two ingredients for a bank to get into big trouble: a bad economy and poor judgment on who should get a loan, according to a report issued by Robinson-Humphrey Co., an Atlanta-based securities firm.

New England and Texas managed to hit the daily double. But, according to the report, most of the lending in the Southeast has been "reasonably intelligent."

That's a switch, especially from the days of the mid-1970s in the Southeast when banks were involved in loans on projects that still are begging for money to get the concrete flowing.

Said Kathyrn Hart Bissette, a bank analyst with Interstate/Johnson Lane, an Atlanta securities firm: "The banks today are so much better managed. These are real professionals, for the most part."

Also, because of the interstate banking compact that Southern states approved starting in 1985, some Southeastern banks look formidable, even compared to their Northeast counterparts.

NCNB Corp. is the nation's seventh-largest bank. When third-quarter earnings were released Wednesday, chairman Hugh McColl emphasized how he liked the cards he was holding compared to the rest of the United States:

"NCNB's earnings this quarter reflect the difficult operating environment facing banks today. . . . However, we continue to benefit from our broad franchise in the Carolinas, Florida and Texas, markets that are relatively stronger than the nation as a whole."

Bigger doesn't mean better or smarter _ Bank Of America proved that in the 1970s and early 1980s. But bigger usually means banks have more of a cushion. Two bad real estate loans won't shake the foundations.

That doesn't mean big regional banks are upbeat.

The American Bankers Association is meeting in Orlando this week, and NCNB Corp. isn't sending anyone to it.

The cost of such a trip for a company that so far this year has made a profit of $334.5-million couldn't be much of a problem. It's a symbol of belt tightening.

Said Dick Stilley, a spokesman for NCNB in Charlotte, N.C., "When you trim costs, you trim costs. There are a lot of things you can't control _ the cost of oil, interest rates. . . . This you can control."

And for customers, as well as taxpayers who might have to bail out bankers, that's good news.