Fifth Third's Brain Teaser

Fifth Third Bancorp(FITB - Cramer's Take - Stockpickr) issued a third-quarter earnings update Friday that takes some serious number crunching to decipher.

In the filing, the Cincinnati-based bank says it expects third-quarter operating expenses to decline from a year ago due to a "focus on efficiency initiatives." But Fifth Third didn't provide an estimate of its operating expenses, making it a chore for most investors to determine just how much cost-savings the bank expects to report.

Instead, what Fifth Third says is that operating expenses will come in about $100 million lower than the second quarter of this year, an unusual comparison in itself. To compound matters, the bank didn't include the second-quarter figure in its Friday filing.

No problem. A review of the bank's second-quarter 10-Q reveals that expenses totaled $743.7 million. So, using that number, investors can expect the bank to report operating expenses of $643.7 million.

But wait a minute. In the third quarter of last year, Fifth Third reported expenses of $634 million. It doesn't take a math genius to figure out that based on those numbers, Fifth Third is looking at a $10 million increase in expenses in the current quarter, not a decrease.

Is this a case of Fifth Third trying to throw investors a curve? Not exactly, but it did take a call to the bank's investor relations department to get to the bottom of the matter.

Bradley Adams, Fifth Third's investor relations director, says that in the first quarter of this year, the bank restated all of its earnings for the past 10 years when it began expensing stock options. Using the restated numbers, the bank's operating expenses in the third quarter of 2003 totaled $657 million. With the restated number, the bank is on target to reduce third-quarter expenses by about $13 million, compared to a year ago.

That's a lot of work. Too bad Fifth Third just didn't come out and tell investors that number in its filing.