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Fifth Third Announces 2012 Earnings Per Share Of $1.66, Up 41 Percent From 2011

Net gains on investment securities were $2 million in the fourth quarter of 2012, compared with investment securities gains of $2 million in the previous quarter and $5 million in the fourth quarter of 2011.

Noninterest Expense

  For the Three Months Ended   % Change
December   September   June   March   December    
2012   2012   2012   2012   2011   Seq   Yr/Yr
Noninterest Expense ($ in millions)
Salaries, wages and incentives $416 $399 $393 $399 $393 4% 6%
Employee benefits 96 79 84 112 84 22% 15%
Net occupancy expense 76 76 74 77 79 - (3%)
Technology and communications 52 49 48 47 48 6% 10%
Equipment expense 27 28 27 27 27 (2%) (1%)
Card and processing expense 31 30 30 30 28 5% 10%
Other noninterest expense   465   345   281   281   334   35%   39%
Total noninterest expense   $1,163   $1,006   $937   $973   $993   16%   17%
 

Noninterest expense of $1.2 billion increased 16 percent from the third quarter of 2012 and increased 17 percent from the fourth quarter of 2011. Fourth quarter 2012 expenses included $134 million of debt extinguishment costs associated with the termination of $1 billion of FHLB debt; $26 million of additional expenses associated with the increase in the representation and warranty reserve; and $13 million in charges to increase litigation reserves. Third quarter 2012 expenses included $26 million of debt extinguishment costs associated with the redemption of Capital Trust V and Capital Trust VI TruPS; $22 million of additional expenses associated with the increase in the mortgage representation and warranty reserve; $5 million in charges to increase litigation reserves; a $5 million benefit from the sale of affordable housing investments; and $2 million of costs associated with the sale of certain Fifth Third funds. Fourth quarter 2011 expenses included $10 million in charges to increase litigation reserves, primarily related to bankcard association membership. Excluding these items, noninterest expense of $990 million increased $34 million, or 4 percent, compared with the third quarter of 2012 and increased $7 million, or 1 percent, compared with the fourth quarter of 2011. The increase in both periods was largely due to higher compensation-related expenses, primarily performance incentives, driven by strong mortgage originations and commercial and corporate banking results. In addition, the sequential comparison was affected by $6 million of annual pension settlement expense in the fourth quarter.

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