Mortgage revenue totaled $258 million in the fourth quarter, increasing from $200 million the previous quarter and $156 million a year earlier, as the company continued to take advantage of the mortgage loan refinance boom, in a time of historically low interest rates.
The company's corporate banking revenue increased 13% sequentially and 38% year-over-year to $114 million in the fourth quarter, while service charges on deposit accounts were up 5% quarter-over-quarter to $134 million. Deposit account service charges were down 1% from a year earlier.
Fifth Third's fourth-quarter provision for loan and lease losses was $76 million, increasing from $65 million the previous quarter and $55 million a year earlier, as the company was realizing less benefit from the improvement in credit quality, as expected at this point in the economic recovery. Loan loss reserves declined by $101 million in the fourth quarter, boosting earnings.
The company continued to report strong loan growth, with period-end total portfolio loan balances growing by 3% sequentially to $85.782 billion, while (non-real estate) commercial and industrial (C&I) loans were up 8% from the previous quarter to $36.038 billion, as of Dec. 31.Fifth Third's fourth-quarter return on average assets was 1.33%, improving from 1.23% in the third quarter and 1.08% in the fourth quarter of 2011. The company's return on tangible common equity during the fourth quarter was 14.1%, increasing from 12.8% the previous quarter and 11.9% a year earlier. Fifth Third's shares closed at $15.55 Wednesday, trading for 1.3 times their reported Dec. 31 tangible book value of $12.33, and 9.8 times the consensus 2013 EPS estimate of $1.59. The consensus 2014 EPS estimate is $1.66. Based on a quarterly payout of 10 cents the shares have a dividend yield of 2.57%. The company repurchased roughly $650 million worth of common shares during 2012, including $175 related to gains from sales of Vantiv shares. The company's 2012 capital plan authorized another $125 million in share buybacks for the first quarter of 2013. Jefferies analyst Ken Usdin in a note following the earnings release called Fifth Third's fourth-quarter results a "solid beat" of the consensus estimate, and said that "forward guidance for 2013 is better than expected and should support
Interested in more on Fifth Third Bancorp? See TheStreet Ratings' report card for this stock.
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