Tuesday, July 13, 1999

INDUSTRY NOTES: BANKING


Banks may post higher earnings

BY JEFF McKINNEY
The Cincinnati Enquirer

        Robust gains in fee income, acquisitions and loan growth should help Ohio banks post double-digit increases when second-quarter results are announced this month, a top industry analyst says.

        Fifth Third Bancorp and Provident Financial Group Inc. — Cincinnati's two largest banks — are among those that are expected to see higher earnings because of their focus on increasing fee income and generating higher revenues.

        Fred Cummings of McDonald & Co. in Cleveland predicted that the group of regional banks that his firm tracks — including Ohio's seven largest — should report a 13 percent gain in second-quarter share earnings growth from a year ago. Many banks, including Fifth Third and Firstar, will begin releasing their figures this week.

        They also expect those factors — coupled with benefits from its recent merger — to accelerate earnings of Milwaukee-based Firstar Corp., successor to Cincinnati's Star Banc Corp.

        Mr. Cummings expects non-interest income to rise 4 percent to 6 percent; fee income to increase 10 percent to 12 percent; and money set aside for problem loans to rise 10 percent to 15 percent.

        Here's a quick glance at Mr. Cummings' 1999 second-quarter share earnings outlook from a year ago for most of Ohio's largest banks:

        • Fifth Third — 58 cents, up from 50 cents.

        • Provident — 78 cents, up from 71 cents.

        • Firstar Corp. — 28 cents, up from 22 cents.

        • Bank One Corp. — 94 cents, up from 76 cents.

        • Huntington Bancshares Inc. — 47 cents, up from 43 cents.

        • Sky Financial Group Inc. — 45 cents, up from 36 cents.

        • First Financial Bancorp — 33 cents, up from 30 cents.

        • National City Corp. — $1.13, up from 99 cents.

Bank, church, thrift team up for housing
        The Federal Home Loan Bank of Cincinnati has teamed up with a local church and thrift to provide new housing to senior citizens.

        Lee Chapel African Methodist Episcopal Church, Franklin Savings and Loan and the FHLB Friday dedicated a new 18-unit apartment building for elderly residents of the church in O'Bryonville.

        Through the FHLB's affordable housing program, Franklin Savings provided the church a low-interest $1.2 million loan for the $1.4 million project. The church raised the remaining $200,000.

        The project, which will help reduce monthly rental rates by about $200 to $468, includes independent-living units that are equipped with kitchens and air conditioning as well as safety and security systems.

        The FHLB of Cincinnati is a $42 billion regional credit bank that provides housing financing and services to more than 750 lenders in Ohio, Kentucky and Tennessee.

Banc One may sell $2 billion in debt
        Banc One Corp., the nation's fifth-largest bank, plans to sell $2 billion of debt, divided between three- and seven-year notes, according to industry sources familiar with the sale.

        The notes, expected to be priced Thursday, are rated “Aa3” by Moody's Investors Service and “A+” by Standard & Poor's.

        Bank One, which last year acquired First Chicago NBD Corp. for about $20 million, is also the nation's second-largest credit card issuer. Bank One operates 33 branches in Greater Cincinnati.

Banc Stock Group launches stock site
        The Banc Stock Group has launched www.IPOdepot.comm, an Internet site that would allow individuals to research and invest in stock of regional and small community banks.

        The service will be offered through the Columbus-based company's subsidiary, Banc Stock Financial Services, a broker dealer and investment adviser.

        Banc Stock Financial Services allows its customers to invest in IPOs of community and regional banks.

       



Fifth Third gains Peoples
Dillard's at Kenwood loses day to inventory
- INDUSTRY NOTES: BANKING
TRISTATE SUMMARY
PEOPLE ON THE MOVE
TRISTATE MARKET SPOTLIGHT