2. Fifth Third Bancorp
Fifth Third followed the fourth-quarter trend of for many of the large regional players, but saw revenue pressure, mainly from the Durbin rule limiting debit card interchange fees.Fourth-quarter earnings available to common shareholders were $305 million, or 33 cents a share, declining from $373 million, or 40 cents a share, in the third quarter, but increasing from $270 million, or 33 cents a share, in the fourth quarter of 2010. During the fourth quarter, the company took a $54 million pretax charge related to "changes in the fair value of a swap liability that Fifth Third entered into in conjunction with its sale of Class B Visa shares in 2009," along with a $14 million charge "to increase litigation reserves associated with bankcard association membership." card and processing revenue decline to $60 million from $78 million the previous quarter and $81 million a year earlier. Please see TheStreet's detailed earnings coverage for more on Fifth Third's margin, loan and deposit growth, and credit quality improvement. The company's ROA has ranged between 0.96% and 1.35% over the past five quarters. During the company's earnings conference call on Jan. 20, Fifth Third CFO Dan Poston said "we intend to continue the process of normalizing our dividend by moving it to levels more consistent with the Fed's near-term payout ratio guidance of 30%." Jefferies analyst Ken Usdin on Jan. 23 reiterated his "Buy" rating for Fifth Third, with a price target of $15, while lowering his 2012 EPS estimate to $1.35 from $1.40 and his 2013 estimate to $1.40 from $1.50, "mainly on higher expenses." Despite what he called "a disappointing fourth quarter," Usdin said there remains a lot to like, as the core business is growing well, credit is improving, and the capital return story has yet to play out." The analyst said that "already boasting Basel III Tier 1 common of 9.7%, we believe Fifth Third has $1.3B-$1.8B in excess capital," and that he expects "FITB to payout 50% of earnings (dividends and buybacks) in '12 and 70% in '13." The shares trade for 1.3 times tangible book value and nine times the consensus 2012 EPS estimate of $1.41. Interested in more on Fifth Third Bancorp? See TheStreet Ratings' report card for this stock.