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Tickers in this Article: C, BAC, BBT, FHN, STI
While Bank of America (NYSE:BAC) just can't seem to get past the bad debt fiasco that came to a head in 2008, it would be wrong to assume the worthless loan woes still apply to all banks. The fact of the matter is, if last quarter's numbers are any indication, the smaller and regional names have managed to further distance themselves from the mortgage problems Bank of America can't seem to escape.

IN PICTURES: 6 Major Credit Card Mistakes

Still Sick, But Not Contagious
Just for perspective, despite revenue of $22.6 billion, BofA lost $1.6 billion last quarter. The bulk of the blame can be placed on the $4.1 billion charge for mortgage repurchase claims, but a loss is a loss, and one has to wonder how many more "one time charges" there can be before accountants lose the audacity to call them "one time" anythings.

To be fair, the operating EPS of four cents was better on a year-over-year basis, but on the other hand, the bank took a $5.2 billion loan provision loss in the last quarter of last year - it wouldn't take much to look better now.

Banking's not a miserable business to be in, though, even if BofA still has more than $10 billion worth of bad loans to process before it's all said and done. The trick for investors is finding banks that didn't dig themselves into as deep of a hole as Bank of America was able to. As it turns out, the smaller regional names were lucky to have never been able to crawl all the way into that hole in the first place.

Anything You Can Do I Can Do Better
BB&T Corporation (NYSE:BBT) managed to improve its EPS from 27 cents to 30 cents in its most recent quarter. Net charge-offs were technically higher by $50 million, leaving behind only $208 million in income. That was still better than Q4 from a year earlier, however. BB&T specifically said that delinquencies were improving.

Another regional name, First Horizon National (NYSE:FHN), also saw improvements in its bottom line on a major improvement in its loan portfolio. The fourth quarter EPS loss shrunk from 30 cents a year earlier to only a 20 cents loss this time around, though it's worth mentioning the $63 million in costs related to repaying TARP last quarter were actually bigger than the $48.7 million loss.

First Horizon reported a 10% drop in net charge-offs since the third quarter, and a 45% dip in charge-offs from the fourth quarter of 2009. Nonperforming assets were lows by 9% on a QOQ basis, and lower by 20% with a YOY look.

Suntrust Banks (NYSE:STI) was singing the same song - lower loan losses, and a gradual improvement in the quality of its loan portfolio.

And just for the record, BB&T's as well as SunTrust's earnings figures were upside surprises.

The Bottom Line
In fairness to the mega-banks, it's not as if BofA speaks for all of them. On the other hand, after Citigroup (NYSE:C) posted earnings of four cents per share versus estimates of eight cents, one has to wonder if any of these huge names every really escaped the mortgage crisis, and perhaps they have just delayed the pain.

Similarly, it's not like SunTrust, BB&T, and First Horizon speak for the whole regional bank group either. But, when the underlying reason for better numbers are all cited as the same reason - healthier loan portfolios - it's tough not to generalize. (Find out which type of account suits your specific needs. See Demystification Of Bank Accounts.)

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