Though consumer credit losses continue to mount, fee revenue and expense controls are helping Midwest institutions to post increases in second-quarter earnings.

First of America Bank Corp. credited core revenue growth and an expense- reduction program for earnings of $62.3 million, a 10% increase over last year's second quarter. Results benefited from a $9 million pretax reduction in federal deposit insurance.

In last year's second quarter, the company took a $6.6 million charge for restructuring.

"Performance is fine, but they still have quite a bit of work to do," said Michael Moran, an analyst with Roney & Co. in Detroit.

The provision for loan losses was up 5.5% as a result of consumer credit problems.

Richard Chormann, First of America's chairman and chief executive, said his company has been taking steps to remedy higher credit losses, including more stringent underwriting and collections. "Since mid-1995 we, too, have experienced a rise in both delinquencies and net losses in our installment loan and credit card portfolios," he said.

Three Ohio banks reported double-digit earnings increases despite upticks in loan losses. Huntington Bancshares, Columbus, reported quarterly income of $65.1 million, a 12% increase. The $20 billion-asset company notched 11.6% growth in consumer credits. Net interest income grew 5%, to $189 million, while non-interest income rose 28.4%, to $67 million. The loan-loss provision jumped to $11.9 million, up $7.1 million from last year's second quarter.

Star Banc Corp. of Cincinnati said net income rose 18% over the year- earlier quarter to $39.8 million. Non-interest income was up 26.5% to $42.4 million, spurred by fees on bank accounts and trust business.

The $9.7 billion-asset Star Banc said asset quality remains strong. Quarterly net chargeoffs as a percentage of average loans was 0.31%, which analysts said was historically low for the company.

However, the company's loan-loss provision was up to $8.7 million, a 26% increase over second quarter 1995.

Provident Bancorp of Cincinnati reported earnings of $20.3 million, a 23% increase over a year earlier, thanks to a gain in net interest income of 19.5%.

However, the bank's loan loss provision of $13.8 million was up by $10.8 million from last year's second quarter to cover increases in consumer installment, credit card, and commercial loan losses. The company said it is reducing its exposure to credit card and indirect auto loans and expects lower writeoffs in this year's second half.

Milwaukee's Marshall & Ilsley Corp., rebounding from a flat first quarter, improved its year-over-year earnings with a 9% increase over second quarter 1995, to $50.4 million. Results were helped by the company's M&I Data Services subsidiary, which reported quarterly income of $66 million, a 27% increase over second quarter 1995.

Asset quality was not an issue at Marshall & Ilsley, which is known for its conservative credit culture. However, loan growth has been slow with total loans down by 2%.

Martin McDevitt, an analyst with Cleary Gull Reiland & McDevitt Inc. in Milwaukee, said he believes M&I will be more aggressively seeking loans in the second half of the year. "Obviously they've had some problems," Mr. McDevitt said. "Loan growth has been very sluggish."

Another conservative Wisconsin institution, First Financial Corp. of Steven Point, reported net income of $17.6 million, an 8% jump. The $5.6 billion-asset thrift credited an increase in non-interest income, while it held the line on non-interest expenses.

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