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PROVIDENT BANK $100 MILLION SUB NOTES RATED 'BBB+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Jan. 14 /PRNewswire/ -- The Provident Bank's $100 million 6.375% subordinated notes due 2004 are rated 'BBB+' by Fitch. Provident is the principal subsidiary of Provident Bancorp, Inc. (NASDAQ: PRBK), a multibank holding company located in Cincinnati, OH, which had total assets of $4.7 billion at Dec. 31, 1993. The credit trend is stable.
 The rating reflects Provident's strong commercial lending and deposit franchise, excellent asset quality and operating efficiency, and solid capital ratios. Concerns focus on PRBK's presence in a very competitive banking market. In addition, PRBK's below-average level of fee income increases the company's vulnerability to earnings volatility caused by changes in interest rates or price competition for commercial loans.
 Highlights of PRBK's 1993 performance included strong core earnings, which benefited from an enhanced net interest margin and operating efficiency among the lowest in the regional bank group. PRBK earned $51.3 million in 1993, representing a return on average assets of 1.30%. The company's net interest margin improved to 4.41% in 1993 from 4.33% in 1992. Operating efficiency improved to 54.8% in 1993 as the company was able to achieve some economies of scale as a result of mergers completed in 1992.
 Asset quality also exhibited significant improvement in 1993. PRBK reduced its non performing assets (NPAs) to $27 million as of Dec. 31, 1993, representing only 0.80% of loans and other real estate owned. Importantly, the company reduced its NPAs without having to charge off an unusual amount of the problem loans; PRBK's net loan losses for 1993 totalled only $7.3 million or less than 0.25% of average loans outstanding. In addition, PRBK ended 1993 well positioned to manage its remaining loan quality issues. The company's loan loss reserve increased to $40.5 million or 223% of non-accrual loans as of Dec. 31, 1993.
 Capital levels remain strong with the company's leverage, Tier 1 risk-based and total risk-based capital at 7.90%, 8.89%, and 12.24%, respectively, at Dec. 31, 1993.
 -0- 1/14/94
 /CONTACT: Scott J. O'Donnell of Fitch, 212-908-0531/
 (PRBK)


CO: Provident Bancorp ST: Ohio IN: FIN SU: RTG

TW-CB -- NY022 -- 2088 01/14/94 11:38 EST
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Publication:PR Newswire
Date:Jan 14, 1994
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