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6 Bank Stock Picks for Earnings Season From FBR

Fifth Third Bancorp
Shares of Fifth Third Bancorp (FITB - Get Report) of Cincinnati closed at $13.95 Friday, up 10% year to date, following an 11% decline during 2011.

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The shares trade for 1.3 times tangible book value and for nine times the consensus 2013 earnings estimate of $1.54 a share. The consensus 2012 EPS estimate is $1.47.

Based on a quarterly payout of 8 cents, the shares have a dividend yield of 2.29%.

Fifth Third reported first-quarter earnings of 45 cents a share, beating the consensus estimate of 36 cents, and followed the industry trend in a big way with mortgage revenue doubling year over year.

However, the first-quarter results included several one-time items, including a $115 million pretax benefit (roughly $75 million, or 8 cents a share, after tax) from gains from the initial public offering of Fifth Third's (VNTV) subsidiary, a $36 million pretax charge ($23 million, or 2 cents a share, after tax), "from Vantiv debt termination-related charges recorded in equity method earnings," and a "benefit of $46 million pre-tax (approximately $30 million after-tax, or $0.03 per share), from gains on the higher valuation of the warrant Fifth Third holds in Vantiv."

Excluding the above one-time items, first-quarter operating earnings of 36 cents would match the consensus estimate.

Miller on Thursday reiterated his outperform rating for Fifth Third, saying the company's "capital position is well above Basel III requirements and management has been vocal about its intention to return capital to shareholders." After having its previous capital plan rejected in part by the Federal Reserve, the company "recently resubmitted a capital plan to regulators that proposes a dividend hike and share repurchase increase," which Miller believes "could add significant value to shares and will position the company to outperform peers."

Miller's price target for Fifth Third is $18. The analyst said the company's first-quarter results were "encouraging and included improving credit metrics, higher-than-expected mortgage net interest income, decent loan growth, and impressive mortgage banking revenues."

FBR estimated that Fifth Third will earn $1.42 a share this year, followed by 2013 EPS of $1.55.

Interested in more on Fifth Third Bancorp? See TheStreet Ratings' report card for this stock.

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