Atlanta and Cleveland are far from Wall Street, but regionalbanks in those and other U.S. cities are mimicking their biggercompetitors by plunging into capital markets.

SunTrust Banks, KeyCorp and Citizens Financial Group are amonglarge regional lenders that have been building out theirinvestment-banking capabilities as stubbornly low interest rateshave crimped profits. Now they're reaping the benefit, reportingrecord fee income from the units in the first half of the year.

Investment-banking revenues at seven of the 11 largest regionalbanks that break out results for the business climbed a combined$339 million in the first half of the year. The lenders areoffering merger advice, debt underwriting and help raising capitalto the same types of middle-market companies that they've longprovided with routine banking services. That segment of the markethas been eager to grow in recent years, with 31% of executives in arecent SunTrust survey saying they'd like to make a major capitalinvestment over the next five years and 17% interested in acquiringanother company.

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