Anxiety about bank fourth-quarter earnings continues to permeate the market, but analysts seem to be worrying least about Milwaukee-based Firstar Corp.

The $71-billion asset regional is likely to produce stronger fourth-quarter earnings than most banks, some analysts contend.

"The fourth quarter typically is not a blowout quarter for most banking companies," said Eric Rothmann, an analyst at First Security Van Kasper in San Francisco, "but Firstar is expected to deliver stronger numbers, which are being driven by its excellent business operations."

Mr. Rothmann, who initiated coverage on the company last week with a 'buy" rating, said that though most of the industry is looking at 10% to 12% growth for the fourth quarter, Firstar is looking at 17%.

"The numbers speak for themselves," Mr. Rothmann said.

Lori Appelbaum, an analyst at Goldman, Sachs & Co. also predicted that Firstar will be a strong fourth-quarter performers.

"We have increased confidence in the revenue growth outlook for the company," said Ms. Appelbaum, who recently met with the company's management.

Revenue growth is likely to accelerate to 5% to 7% in the fourth quarter, compared with no growth in the third quarter, she noted.

Firstar's net interest margin is likely to increase about 10 basis points from last quarter, because the company is selling higher-margin consumer loans through Mercantile, Ms. Appelbaum said. Net interest margin is also likely to increase, because the company reconfigured Mercantile's balance sheet by selling off billions of dollars of bonds and mortgages at the end of the third quarter.

Although demand deposit growth for the industry in the fourth quarter is likely to be flat, according to the Federal Reserve, Firstar's total deposit growth is 8%, she said.

Firstar's unique management style also helped the company's smooth out its larger integration of Mercantile, Ms. Appelbaum said.

Firstar has a "branch buddy" system, in which each Firstar branch is coupled with a Mercantile branch, making it relatively easy for Firstar to transfer its growth strategies and incentive compensation levels to Mercantile more quickly. The system has been quite successful, Ms. Appelbaum said.

She told of a manager of a Star Banc branch in Kentucky that was coupled with a Firstar branch in Wisconsin. (Firstar merged with Star Banc in 1998.) The Kentucky branch manager earned a $20,000 bonus on top of his $25,000 in base compensation for his work in helping the Wisconsin branch improve its earnings, she said.

Firstar's management is not likely to pursue a large acquisition anytime soon, because of the company's depressed stock price, Ms. Appelbaum said. Management's financial criteria for mergers is 10% accretion and internal rates of return of more than 12%. Any future mergers would have to meet these criteria. She said current economic conditions favor internal growth rather than acquired growth.

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