Midwestern banks showed little growth in the third quarter. Revenue generation was slow, and payments for the thrift fund obliterated income at the two of the biggest regional thrifts.

Overall earnings performance was stable, analysts said, with few surprises.

But there was a clear delineation between banks that have diversified into nontraditional banking services and those that rely on more traditional lending and bank fees. The banks with the more traditional businesses lagged, said Michael Durante of McDonald & Company Securities.

Among the banks that showed strength: Fifth Third Bancorp. of Cincinnati and Northern Trust Corp. of Chicago.

Mr. Durante named Firstar Corp. of Milwaukee and Mercantile Bancorp. of St. Louis as midsize regional banks with share prices that are benefiting from takeover speculation rather than fundamental business growth.

At two thrifts - Standard Federal Bancorp and Roosvelt Financial Group Inc. - earnings took a hit because of payments to recapitalize the Savings Association Insurance Fund.

Northern Trust Corp.

The $21 billion-asset Northern Trust posted quarterly earnings of $66.5 million, up 14% from the same period a year ago. As is usually the case with Northern Trust, trust fees increased significantly, up 16% from last year's third quarter to $148 million.

Trust fees account for half of Northern Trust's total revenue. Trust fees were evenly divided between corporate and institutional trust and personal trust.

Corporate and institutional fees grew 21% compared to 1995's third quarter, while personal trust fees increased 12%. Acquisitions helped the corporate business.

However, corporate fees were 3% lower than the second quarter. Personal trust fees increased as a result of new business and expansion, including new offices in the Chicago area.

Fifth Third Bancorp.

Fifth Third earned $79 million in the third quarter, a 5% increase over the same period a year ago. The $20 billion-asset company recorded a $17 million charge for payment to the Savings Association Insurance Fund.

Fifth Third also had good net interest income and noninterest income growth, spurred by strong loan demand and fee businesses such as trust and data processing. Consumer loans and leases increased 23.5% to $735 million.

Firstar Corp.

Firstar Corp. reported that quarterly income rose 3% from a year ago, to $69 million. Firstar's earnings were lowered by an $8 million charge for the thrift fund. Firstar's net interest income grew 2%, while fee income grew about 12% from a year ago.

The $20 billion-asset bank is in the midst of a major cost-cutting effort, which may have hampered loan growth, said Dain Bosworth analyst Ben Crabtree. Loan growth "hasn't been great anywhere, but this is the weakest," Mr. Crabtree said.

Despite its cost cutting, Firstar's noninterest expenses were up 7.5% from a year ago because of the thrift fund assessment and restructuring charges.

Mercantile Bancorp.

A thrift fund assessment also impeded Mercantile Bancorp.'s earnings, leading to an 11% decline to $56 million.

The $18 billion-asset Mercantile said net-interest income improved 6% to $175 million, while noninterest income was up 3.5% to $74.5 million.

While credit card fees more than doubled to $8.9 million, analysts said the company has had problems with an unprofitable cobranded card with Southwestern Bell. "I don't know how a business can account for 10% of assets, but generate 0% of profits," Mr. Crabtree said.

Mr. Durante said Mercantile and Firstar are similarly benefiting from cost cutting, while failing to identify at least one business that is going to provide above-average revenue.

The cobranded credit card was supposed to be Mercantile's answer, but the company ran into problems earlier this year when it realized the business was losing money.

Old Kent Financial Corp.

The $12.5 billion-asset Old Kent Financial Corp. posted quarterly income of $40 million, a 5% increase from a year ago. It was due largely to a 20% increase in noninterest income, to $57 million.

Total loans at the Grand Rapids, Mich.-based company grew 12% to $8 billion. Most of the noninterest gains were from mortgage banking fees. Loan growth was up primarily because of 14% growth in commercial loans.

Commerce Bancshares

Kansas City-based Commerce Bancshares said income rose 12% to $31 million.

Noninterest income of $40 million was up 18%, while net-interest income rose 1% to $92 million. Noninterest income benefited from gains in trust, deposit account fees and credit card transactions, the company said.

Standard Federal Bancorp.

Troy, Mich.-based Standard Federal Bancorp. reported an $8 million loss in income in the third quarter, compared with a $31 million gain posted in the same period a year ago. The company blamed a $44 million after-tax charge for a payment to the thrift fund.

Excluding the special assessment, Standard Federal said it would have posted a 16% gain. Net interest income grew 26% to $102 million, due to strong mortgage loan demand. For the nine months of the year, mortgage originations were up 55% to $7.9 billion, the company said.

Charter One Financial Inc.

Cleveland's Charter One Financial Inc. was also socked by a large thrift fund assessment of $37 million after taxes. As a result of the charge, the $14 billion-asset Charter One reported net income of $5 million, compared with $32 million in last year's third quarter.

Net interest income was up 24% to $97 million.

In addition to mortgages, Charter One reported increases in consumer loans and commercial leases.

Roosevelt Financial Group Inc.

Roosevelt Financial Group Inc.'s earnings were all but wiped out by a thrift fund assessment of $18 million. The St. Louis-based company reported income of $508,000, compared with $21 million in last year's third quarter.

Roosevelt's earnings were also affected by a $1.5 million charge to revamp its balance sheet. The $9 billion-asset company is reducing its holdings in mortgage-backed securities and retiring its outstanding debt.

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