By Jeff McKinney
The Cincinnati Enquirer
A big reduction in costs to cover problem loans helped the parent of Provident Bank post a 15 percent gain in third-quarter profits.
Provident Financial Group Inc., Greater Cincinnati's second-largest bank based on deposits, earned $27.5 million, or 54 cents a share, up from $24 million, or 47 cents a share, in last year's third quarter.
The gain came as the company greatly improved credit and asset quality and set aside less money to cover potential bad loans.
Provident, which has been aggressively trying to cut its credit risk exposure in recent quarters, also said charge-offs in the quarter for bad loans were at their lowest since the second quarter 2000.
The bank said its third-quarter provision for loan and lease losses totaled $11.9 million, down from $23.5 million a year ago. Its charge-offs for loans and leases were 0.57 percent, down from 1.55 percent in 2002's third quarter. And, the bank's reserves for loan and lease losses were $184.2 million, versus $204.8 million a year ago.
Provident also said net interest income, most banks' main source of profits, fell 4.7 percent to $74.1 million from $77.6 million in last year's third quarter, while its net interest margin slipped to 2.01 percent from 2.37 percent from a year ago. Both reductions largely reflected Provident's sale of $471 million of sub-prime mortgage loans last quarter.
In other reports:
Winton Financial Inc.: Double-digit growth in mortgage banking revenue and lower expenses helped the parent of Winton Savings and Loan Co. post record profits for its fiscal year ended Sept. 30.
The Monfort Heights-based thrift made $5.7 million, or $1.23 a share, up from $5 million, or $1.10 a share, in the year-ago period.
The higher earnings came as Winton's net interest income rose 5.1 percent to $736,000, mortgage-banking revenue jumped 42.1 percent to $972,000 and provisions for losses on loans fell by 52 percent, or $655,000.
For the fourth quarter, Winton had net income of $988,000, or 21 cents a share, down from $1.2 million, or 26 cents a share, a year ago. The quarterly drop came as Winton's mortgage banking income declined and the bank covered the cost of a new branch.
Winton, with assets of $544.4 million, mainly operates seven branches in Hamilton County.
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