For many U.S. banks, Christopher Carey figures that profits for 2001 could be among the weakest since the last recession.

        The challenging period comes after banks enjoyed several consecutive years of record profits in the 1990s. But bank profits, while still strong, began slipping in 2000 as the economy cooled off.

        Mr. Carey, chief financial officer at Provident Financial Group Inc., said profits for many banking companies — including his own, which is the parent of Cincinnati's Provident Bank — have been affected by last year's weak economy. He said the soft economy resulted in more problem loans for financial companies, largely because businesses banks lent to suffered financial weakness.

        Moreover, he said the Sept. 11 terrorist attacks compounded an already tough year for banks.

        Those two factors likely will shape results when banks start reporting 2001 financial outcomes next week.

        “It was the first year probably since 1991 we've been in recession, and that's going to affect some earnings,” Mr. Carey said. “What happened Sept. 11 only made matters worse.”

        Provident earlier this month lowered its profit estimate for this year to be tween $2.30 and $2.60 a share, down from analysts' earlier share earnings esti mate of $2.93.

        Overall, results for the fourth quarter and last year should be mixed for some of the Midwest's largest banks, including many with sizeable Tristate operations.

        Fred Cummings of McDonald Investments in Cleveland said regional banks that his firm tracks — including the likes of Fifth Third, U.S. Bancorp, Provident, National City and Huntington and First Financial Bancorp — will in general show weaker growth.

        He predicted 5 percent earnings growth for nine of those banks, versus 11 percent growth for that group in the third quarter of 2001. He said only two of those banks — including Cincinnati's Fifth Third and Cleveland's Charter One — will show double-digit earnings growth.

        “Large charge-offs, particularly commercial credit losses, hurt some banks because of the slowing economy,” Mr. Cummings said. “It was a tough year for many banks.”

        Still, Mr. Cummings expects banks overall to outperform many other business sectors.

        Standard & Poor's estimates that fourth-quarter 2001 earnings for its S&P 500 Index will be 14 percent below what was earned in the fourth quarter 2000.

        Here's Mr. Cummings' fourth-quarter share earnings outlooks for some of the area's largest banks, compared with the fourth quarter of 2000.

        Fifth Third: 63 cents versus 50 cents. The fourth quarter 2000 number does not include Fifth Third's $5 billion acquisition of Old Kent Financial Corp., completed in April.

        Mr. Cummings said the Cincinnati bank had a great year, largely helped by well-managed asset quality, though the bank will show slightly higher charge-offs than usual for commercial loans.

        He expects 10 percent growth in revenues, fueled by loan growth and fee income. He said fee income will be greatly boosted by Midwest Payment Systems, Fifth Third's data-processing arm.

        Provident Financial Group: A loss of 57 cents compared with a gain of 2 cents.

        Mr. Cummings said credit-quality problems continues to dog Provident. The bank is expected to take an after-tax reduction of $50 million in the quarter tied to loans in the airline industry and also to boost loan loss reserves and cover bad commercial loans.

        “They've been challenged by this credit quality issue and slowing economy, but once the economy improves and credit costs drop, that clearly will help their earnings,” Mr. Cummings said.

        U.S. Bancorp: 39 cents versus 41 cents.

        Quarterly results will show modest revenue growth, good expense control and higher credit quality costs.

        The bank dealt with most of its credit losses in the third quarter, largely by setting aside more than $1 billion to cover potentially more bad loans.

        First Financial Bancorp: 27 cents compared with 31 cents.

        Mr. Cummings said the decline will mainly stem from higher credit costs to cover problem commercial loans and slower loan growth.

        Heading into 2002, Todd Davenport, banking editor at SNL Securities, said banks will continue to make money, but won't reap the profits they had in the 1990s because of rising credit costs.

        He noted that several other major U.S. banks have already warned of higher charge-offs for the fourth quarter.

        Among them: PNC Financial Services Group Inc., parent of PNC Bank, expects a fourth-quarter loss as profits will be cut by $615 million as its exits and reorganizes some lending units; KeyCorp will take a $410 million hit to cover problem loans and investments; Huntington Bancshares Inc. will add $50 million to loan-loss reserves.

        But Mr. Davenport said that while profits will be lower than previous years, banks are very well capitalized and financially sound.

        “It's more of an issue for shareholders right now, than one for depositors,” he said.

        A key for banks could be staying focused on the basics, particularly until the economy bounces back.

        Mike Prescott, regional president of Huntington Bank in Cincinnati, said his bank plans to be even more aggressive on such things as pricing certificates of deposit and retaining profitable business customers.

        “You can't be reactionary because you're in a temporary softer economic cycle and not do what you've always done,” he said.

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