Thursday, January 22, 2004

Provident ready to expand

Most-profitable year since 1999 sets stage for growth

By Jeff McKinney
The Cincinnati Enquirer

After posting Wednesday its best profits in the past four years, the parent of Provident Bank now plans to open new branches and possibly buy local banks to expand its Greater Cincinnati franchise.

Provident Financial Group Inc., Greater Cincinnati's second-largest bank based on deposits, earned $109.3 million, or $2.15 a share, up from $95.5 million, or $1.88 a share, in 2002. It was Provident's most-profitable year since 1999, when it earned $127 million.

Provident has been exiting some higher-risk businesses and cleaning up its balance sheet by charging off problem business loans. It says it is now ready to expand its deposit base and become a larger player locally.

Provident sold $50 million in problem commercial loans and another $60 million in commercial aircraft leases last quarter. The latter cut its exposure in the airline industry to $97 million from $178 million in 2002.

In the fourth quarter, Provident earned $28.7 million, or 56 cents a share, excluding gains from the sale of its Florida branches and other items. Provident earned $26.6 million, or 52 cents a share, in the fourth quarter of 2002.

Wall Street is noticing the bank's efforts. Provident's stock hit a 52-week high of $34.30 a share in trading Wednesday before closing at $34.16, up 99 cents from Tuesday.

Chris Carey, Provident's chief financial officer, said the firm plans to invest more than $5 million to open five branches this year in Cincinnati and Northern Kentucky. It now operates 52 in Greater Cincinnati.

Carey said Provident is open to acquiring other banks and thrifts in Cincinnati and Northern Kentucky to boost deposits. He said the bank also is interested in buying non-traditional banking business to help build fee income, including in the equipment-leasing business.

In other bank earnings:

• U.S. Bank: The Minneapolis firm, with 115 branches locally, earned $977 million, or 50 cents a share, up from $819.7 million, or 43 cents a share, a year ago. For 2003, U.S. Bank made $3.7 billion, or $1.93 a share, up from $3.2 billion, or $1.65 a share, in 2002. U.S. Bancorp's shares fell 25 cents to $27.95.

• Huntington Bancshares Inc.: The Columbus bank, with 29 branches locally, had a net income of $93.3 million, or 40 cents a share, up from $90.9 million, or 39 cents a share, a year earlier. For the year, Huntington earned $372.4 million, or $1.61 a share, up from $323.7 million, or $1.33 a share, during 2002. Huntington's shares closed up 19 cents to $22.75.

• Oak Hill Financial Inc.: The parent of Oak Hill Banks had fourth-quarter net income of $3.1 million, or 54 cents a share, up from $2.7 million, or 50 cents a share, a year earlier. For 2003, Oak Hill earned $12 million, or $2.14 a share, up from $10.5 million, or $1.93 share, during 2002. Oak Hill Banks operates seven branches in the Cincinnati area. Shares closed up 30 cents to $30.55.

• Winton Financial Corp.: The parent of Winton Savings and Loan Co. had fiscal first-quarter profits of $910,000, or 20 cents a share, down from $1.8 million, or 39 cents a share, from the same period in 2002. Winton operates seven branches mainly in Southwestern Ohio. Its stock closed unchanged at $13.30.

• LCNB Corp.: The parent of Lebanon Citizens National Bank, with 18 branches regionally, last year earned $6.7 million, or $3.94 a share, up from $6.5 million, or $3.79 a share, in 2002.


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