Fifth Third Profit Up Slightly on Improved Credit

   By Everdeen Mason 
 

Fifth Third Bancorp (FITB) said its profit climbed slightly in the fourth quarter on improved credit quality and smaller loan-loss provisions, masking a decline in revenue.

The Cincinnati-based lender said it earned $402 million, up from $399 million a year earlier. Per-share earnings, which reflect the payment of preferred dividends, were flat at 43 cents. The current quarter included $69 million in charges related to an increase in litigation reserves, a $91 million benefit from the sale of its shares in payment processor Vantiv Inc. (VNTV) and other items.

Revenue, a combination of noninterest income and net interest income, dropped 9.8% to $1.61 billion.

Analysts polled by Thomson recently expected per-share earnings of 42 cents on revenue of $1.53 billion.

Like other regional banks, Fifth Third saw a plunge in mortgage-banking revenue as rising mortgage rates stymied loan refinancing activity by borrowers. Mortgage-banking revenue dropped 51% to $126 million from

year earlier.

The company recorded a smaller provision for loan losses, off 30% to

a$53 million from a year earlier. The move came as its net charge-off rate, which measures loans deemed uncollectible, slipped to 0.67% from 0.7% a year earlier.

The bank's net interest margin, which measures the spread between what lenders make from lending and investing and what they pay depositors, fell to 3.21% from 3.49% a year earlier and 3.31% in the previous quarter.

Fifth Third shares closed at $21.92 Wednesday and were inactive premarket. The stock is up 34% in the past 12 months.

Write to Everdeen Mason at [e-mail]

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