Rising interest rates could put a dent in Tristate banks' profits during the next few months.

According to the latest Quarterly Banking Profile published by the Federal Deposit Insurance Corp., the nation's banks earned $30.2 billion in the second quarter of 2003. That's up from $23.4 billion in the same quarter in 2002 and is the fourth quarter of record performance in the past 20 months.

But analysts say the recent string of profits - largely fueled by record low interest rates that sparked a flurry of new home loans and refinancing during the past year - could soon come to an end.

Rising interest rates could hurt loan demand and make it tougher for banks to sustain banner profits, said Richard Brown, the FDIC's chief economist. Many Tristate banks posted strong second-quarter profits before rates shot up.

In Southwest Ohio, 30-year fixed mortgages - the traditional benchmark - are up about 1 full percentage point since recording a record low in June. On Tuesday, the Cincinnati Area Board of Realtors reported that Monday's closing average rate for 30-year loans was 6.22 percent. In contrast, that rate was 5.21 percent on June 16.

Rising rates also are expected to cool mortgage originations in coming months. And an expected rise in business lending revenue has not happened either, Brown said.

Northside Bank plans new office in Blue Ash

Northside Bank & Trust Co. plans to open a new branch in Blue Ash by the end of this year. The full-service office will be at 9407 Kenwood Roadand replaces one at 4860 Hunt RoadNorthside has six offices in Greater Cincinnati. The move will create two jobs.

Northside, with assets of more than $400 million, five branches in Hamilton County and one in Butler County, said the new branch will allow the bank to keep pace with rapid economic growth in Blue Ash.

Bank of Kentucky increases dividend

The parent of the Bank of Kentucky has declared a semi-annual cash dividend of 9 cents a share, up a penny from its previous dividend in March.

The Bank of Kentucky Financial Corp., based in Crestview Hills, will pay the new dividend Sept. 26 to shareholders of record Sept. 12. The latest dividend boosts the bank's annual cash dividend 31 percent to 17 cents a share for 2003, versus 13 cents a share in 2002.

One of the area's largest banks, the Bank of Kentucky has assets of $790 million and 25 branches in Northern Kentucky.

Fifth Third expanding Milwaukee data office

Fifth Third Bank has signed a five-year lease to occupy 21,250 square feet in a Milwaukee office building, allowing the Cincinnati banking giant to expand its data-processing unit in Wisconsin.

Fifth Third Processing Solutions will use the space to operate its Milwaukee sales and service hub, where it employs 55 people.

Fifth Third executives said the data-processing unit's customer base has grown 31 percent nationally and 18 percent in Milwaukeeduring the past two years.

The latest announcement comes about two weeks after Fifth Third Processing Solutions decided to close five other offices nationally to consolidate operations.

E-mail jmckinney@enquirer.com