Fifth Third Profits Surged 19.6% in 4th Quarter; Provident Bancorp Had

Rigorous expense controls helped sustain top results at one Cincinnati- based banking company, while margin compression modestly lowered profitability at another institution in the same city.

Fifth Third Bancorp said fourth-quarter earnings reached $64.7 million, a 19.6% leap from restated results of a year ago. Slashing expenses after acquiring a Kentucky thrift, the bank posted a 1.77% annualized return on assets, up 8 basis points.

Meanwhile, Provident Bancorp said quarterly income rose 12%, to $14.9 million. A 50-basis-point drop in Provident's net interest margin helped lower its ROA by 11 basis points, however, to 1.17%.

Prior-year results at Fifth Third were restated to reflect the August stock-swap acquisition of Cumberland Federal Bancorp., a $1 billion-asset Kentucky thrift.

The $15 billion-asset Fifth Third said its fourth-quarter annualized return on equity rose 30 basis points, to 17.9%.

For the full year, Fifth Third earned $244.46 million, or $3.80 per share, versus $206.2 million, or $3.29 per share, in the prior year.

McDonald & Co. analyst Fred Cummings said efficiency figured strongly in Fifth Third's results. Noninterest expenses of $90.4 million were down 4.82% from the third quarter, and down 1.83% from a year ago.

"This is tremendous cost control," said Mr. Cummings. "It really shows how a bank can overcome sluggish revenue growth by attacking the expense base."

Fifth Third's postprovision net interest income fell 1.94% from the third quarter, while fee income rose by 3.71%. The company said average loans and leases rose 5.74% from a year ago, while the weighted average yield rose by 51 basis points, to 7.87%.

The $5.4 billion-asset Provident Bancorp said annualized fourth-quarter returns equaled 16.74% on average equity, down 52 basis points from a year ago.

For the full year, Provident earned $57.7 million, or $3.13 per fully diluted share, versus 1993 earnings of $51.3 million, or $2.85 per share.

The banking company said loan growth spurred a 22% increase in average assets from a year ago, though shrinking margins limited growth in postprovision net interest income to a lesser 9.15%.

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