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TheStreet Open House

10 Bank Stocks You Need to Watch During Earnings Season (Update 1)

3. Fifth Third Bancorp
Shares of Fifth Third Bancorp (FITB) of Cincinnati closed at $13.40 Friday, returning 7% year-to-date, following an 11% decline during 2011.

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Based on a quarterly payout of eight cents, the shares have a dividend yield of 2.39%.

The shares trade for 1.2 times tangible book value, and for 8.9 times the consensus 2013 EPS estimate of $1.51. The consensus 2012 EPS estimate is $1.49.

Fifth Third will announce its second-quarter results on July 19, with the consensus estimate among analysts being a 35-cent profit, declining from 45 cents the previous quarter and matching the company's results during the second quarter of 2011.

UBS analyst Stephen Scinicariello rates Fifth Third a "Buy," with a with a $16 price target, and said on June 25 that during the first quarter, Fifth Third's "run rates for fee income and expenses improved and it will be important for FITB to maintain these levels." Fifth Third's guidance calls for expenses to decline by $15 million during the second quarter from $973 million last quarter while UBS models "a $7MM reduction to $965.6MM."

The analyst expects Fifth Third's net interest margin to "decline by 8bps this quarter to 3.53% (slightly worse than the 5-6bps guided to) and would anticipate some improvement in forward guidance due to trust preferred redemptions (>$1.4B in 2012)."

Scinicariello also expects "loan growth (1.5% sequentially)" and said that "improved guidance on this front" from KeyCorp's management "could be a key driver for the stock.

UBS estimates that Fifth Third will report second-quarter operating earnings of 36 cents a share, with a full-year operating EPS estimate of $1.51 followed by operating EPS of $1.63 in 2013.

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

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