Despite rising concerns, a weaker economy and bad loans, some large banks with sizeable Tristate operations should post strong third-quarter profits.

        Higher fee income and loan growth should help most banks meet or beat earnings expectations this quarter, Fred Cummings of McDonald Investments Inc. in Cleveland said.

        Mr. Cummings expects that on average, share earnings for the 17 regional banks and thrifts that his firm tracks will rise 12 percent in the third quarter compared with a year ago.

        He predicted Cincinnati's Fifth Third Bancorp will show 25 percent rise in share earnings, fueled by brisk fee income growth and higher interest income.

        Though Fifth Third will take merger-related charges of $110 million to $130 million, its balance sheet will show strong fundamentals. Mr. Cummings expects double-digit fee income growth and higher interest income.

        Mr. Cummings also likes prospects for Huntington Bancshares Inc. He said the company's restructuring is off to a good start.

        That includes its decision to sell its Florida franchise for $705 million. Among other things, Mr. Cummings said the move will free up capital and allow Huntington to buy back up to $400 million in stock.

        A quick glance at Mr. Cummings' share earnings outlook for the third quarter, compared with a year earlier:

        • Fifth Third, 60 cents versus 48 cents.
        • Provident, 70 cents versus 22 cents.
        • Huntington, 30 cents versus 17 cents.
        • First Financial, 27 cents versus 31 cents.
        • Bank One, 63 cents versus 50 cents.
        • Oak Hill Financial, 39 cents versus 29 cents.

Credit card users to save on interest

        The Federal Reserve Board's latest move to cut interest rates will save credit card holders about $750 million in interest over the next year, according to CardWeb.com, a payment card research firm.

        But last week's rate cut of a half-percentage point on short-term rates by the Fed and its previous eight rate cuts since January have been muted by pricing policies of credit card issuers.

        Still, the Fed's aggressive rate cutting will reduce overall credit-card interest costs by $7.8 billion annually. That's an average of about $100 a year per U.S. household with credit cards.
       

Bad loan concerns hurting bank stocks

        Concerns that some of the nation's largest banks will have to shell out more cash to cover bad loans is hurting bank stocks.

        The drop comes as some investors are worried banks' third-quarter profits might be hurt because of rising concerns with problem loans, particularly as the U.S. economy continues to slow.

        The Standard & Poor's Major Regional Bank Index, made up of 22 large banks, gained 2.54 points, or 0.62 percent, to 412.48 Tuesday. But the index is still down 3.4 percent from Friday and about 22 percent year to date.

        But other analysts said not all banks should be penalized because a few have will take third-quarter charges tied to credit quality.

        U.S. Bancorp, parent of Firstar Bank, said it will take a $655 million third-quarter charge to earnings to reflect weakness in the airline industry caused by the Sept. 11 attacks and softer economy.

        Jeff McKinney covers banking for the Enquirer. Have news? Call him at 768-8499, e-mail at jmckinney@enquirer.com or fax 564-6991.$QT $E

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