Fewer banks tighten rules on businesses

        Despite continued concerns about credit quality, fewer U.S. banks tightened lending requirements on business loans in the Federal Reserve's latest three-month period, a new Fed survey says.

        The nation's central bank said 25 percent of banks charged higher premiums or demanded tougher terms for commercial loans, down from 45 percent in the November-January period and 51 percent during August-October 2001, according to a survey of top bank officers. Lenders expressed more optimism about the direction of the economy in the latest survey.

        Of the 56 U.S. banks surveyed, 14 banks made standards tougher for loans to larger and midsized commercial borrowers, while 42 reported no change.

        No banks eased lending standards, the survey says.

        The reports come amid continued concern about deteriorating credit quality at banks, largely caused by last year's recession and the Sept. 11 terrorist attacks.

        During last year's fourth quarter, the nation's 25 largest banks took $2.7 billion in costs related to Enron's bankruptcy and the default of Argentina's government, the Federal Deposit Insurance Corp. says.
       

Peoples Community gains 32% in quarter

        Loan growth helped the parent of Peoples Community Bank post a 32 percent gain in fiscal second-quarter earings.

        West Chester-based Peoples Community Bancorp Inc. made $712,000, or 29 cents a share, up from $540,000, or 28 cents a share, during the same period a year ago.

        The increase came as Peoples had higher net income fueled by strong loan originations as lower-yielding investment securities were sold.

        The banking company also completed its acquisition of Kenwood Bancorp Inc., the parent of Kenwood Savings Bank. That deal will add about $50 million in assets and a branch each in Northgate and Kenwood.

        Peoples, with assets of $480 million, operates 11 branches in Butler, Warren and Clermont counties.
       

KeyCorp purchase includes mortgages

        Cleveland's KeyCorp agreed to buy assets, including a $4 billion mortgage loan servicing portfolio and a business that makes new mortgages, from a Swiss Reinsurance Co. unit to expand its commercial real estate operations.

        The asset purchase from Swiss Re's Conning Asset Management will allow KeyCorp to make new commercial mortgages and service loan accounts involving 25 life insurance companies, including MetLife Inc., and pension funds, KeyCorp spokesman David Reavis said. Terms weren't disclosed.

        Hartford, Conn.-based Conning services about $4 billion in commercial mortgages through a St. Louis office and makes new loans through offices in Atlanta, Chicago, Dallas, Denver, Los Angeles, San Francisco and Washington, D.C. The Conning business has 60 employees, Mr. Reavis said.

        KeyCorp, the 11th-largest U.S. bank by assets, expects the transaction to close in about two months. KeyCorp has 25 branches and the Gradison McDonald investment brokerage unit locally.

        KeyCorp also operates the fifth-largest commercial real estate lender with a portfolio of $8.5 billion.
       

        Bloomberg News contributed to this report.
       
       Contact Jeff McKinney at 768-8499; fax 564-6991; or e-mail jmckinney@enquirer.com.

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