Ho-hum - or, better put, hum. Fifth Third Bancorp keeps humming smoothly, generating earnings that most of its peers could only dream about. Returns on average assets each year since 1989 have ranged between 1.62% and 1.74%, a plateau no other large bank has achieved.

The Cincinnati company, which has grown to $15 billion in assets, has mastered a number of arts on its road to first place U.S. Banker's ranking of the 100 largest banks. In fact, the Fifth Third story has been told time and again, in this magazine and elsewhere. The bank has a pervasive sales culture, is tough on costs and generates significant fee income. CEO George A. Schaefer Jr. also credits an important corporate trait: hustle. "In the service business, you have to out-hustle the competition to survive," he says. "You got to work harder than the next guy. You've also got to sell hard."

[Expanded Picture]Both non-interest income and net interest income have roughly doubled over the past five years, showing remarkable balance, one reason why Fifth Third's multiples have also been among the industry's loftiest. At the beginning of March, the company was trading at close to 14 times earnings and 2.38 times book; the latter was second highest among the top 50 banks to Wells, Fargo & Co., according to data from SNL Securities.

Looking at 1994, "the dynamics of their earnings weren't that much different, but one highlight was their ability to control expense growth in a tough revenue-growth environment," says Fred Cummings, an analyst at McDonald & Co. in Cleveland. While revenues swelled at a double-digit rate, managment slowed expenses in the branches and kept a lid on other operating costs, Cummings says, lowering the efficiency ratio - in effect, how much it costs to generate a dollar of revenue - to a scintillating 46.1%.

The company's preoccupation with expenses is reflected in tight controls on travel and business expenses for employees and on paring head count where it isn't absolutely needed. One example: Calls to headquarters are answered by an automated answering service, not by an operator, that queues up calls in the order they come in.

And yet Schaefer believes Fifth Third can do even better - a remark certain to horrify competitors. He expects that new technology will enable it to process at even greater levels of efficiency. "I think in our organization, there's room for a lot of cost improvement," he says. How low can its ratio go? Schaefer points out that there are 10 banks in the Fifth Third system, and "some of them are in the high 30s right now."

Fifth Third also enjoys a strong fee-income stream through its Midwest Payment Systems subsidiary, which handles data processing for the bank and others. Close to half of its business relates to Fifth Third's internal needs, but the unit has become the largest provider of electronic funds transfer services in the nation.

Most banks have seen credit quality improve, but Fifth Third's portfolio is almost spanking clean - just 0.27% of assets nonperforming. Even in the recession years of 1990-91, that number was only marginally above 1%.

Fifth Third hasn't ceded the acquisition trail to others, but it has limited itself to bite-sized deals, including a number for individual branches in adjacent areas of Kentucky and Ohio. Its biggest recent acquisition was for Kentucky's Cumberland Federal Savings, with $1.1 billion in assets.

Schaefer sees a lot to be pleased about in 1995. Commercial and retail loan volume remains strong. The data processing operation is humming along nicely, particularly as it's begun to process credit card transactions for retailers at the point of sale. Best of all, the economy in Fifth Third's Ohio, Kentucky and Indiana service area is quite solid. "Our steel guys are making steel. Our paper guys are making paper," Schaefer says. The bank is even looking to add 150 people when many banks are cutting back.

Of course, those folks will have to work hard. Fifth Third is reminiscent of another Cincinnati legend former Reds baseball player Pete Rose, who in happier days earned himself the nickname "Charlie Hustle" because of how hard he played. The bankers at Fifth Third hustle, and it shows.

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