WASHINGTON

Commercial banks, heading for the sixth straight year of record earnings, made $14.8 billion in the third quarter, the government reported. The healthy economy "is a gift that keeps on giving," said acting FDIC Chairman Andrew C. Hove Jr. But the quarterly rise from a year earlier was less than 1%. Page 2

REGIONAL BANKING

J.P. Morgan & Co., completing its exit from the securities processing business, is selling its European corporate trust and agency business to Citicorp. Page 4

NationsBank said it has agreed to sell Superior Federal Bank of Fort Smith, Ark., to an investment group led by Keefe, Bruyette & Woods. Page 4

COMMUNITY BANKING

In the wake of big bank mergers in Virginia, a wave of new community banks are staking their claim on the state's markets. Page 6

MORTGAGES

James Montgomery, who stepped down as chairman of giant Great Western Financial after its acquisition last summer, applied for a thrift charter to get back in the business on a scale where the personal touch still counts. Page 7

INVESTMENT PRODUCTS

Fleet rehired a veteran of its mutual fund business to coordinate the development and delivery of retail products by its investment affiliates and insurance partners. Page 8

State Street plans to reach further into the European retirement market by buying Bank of Scotland's unit trust services business. Page 8

CORPORATE FINANCE

Institutional investors' growing participation in the leveraged-loan market has spurred creation of new products and transformed the lending landscape. Page 9

CREDIT/DEBIT/ATMs

After a roller-coaster year, Sears' credit card chief has resigned, leaving few clues to the status of the retailing industry's biggest card portfolio. Page 10

TECHNOLOGY

Keeping vendors' names straight at last week's Bank Administration Institute retail delivery conference was almost as tough as judging their products. Page 14

MARKET MONITOR

Standard & Poor's cut South Korea's debt ratings and said it might do so again. Page 22

A flurry of punches hit bank stocks, including a sweeping downgrade by Donaldson, Lufkin & Jenerette. Back page

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