This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Fifth Third Continues Mortgage Streak (Update 1)

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 [the] consensus."

Usdin did say that "the outsized growth rate in C&I will likely raise some questions, as the bulk of it appeared to come towards quarter end," adding that the company's planned run-off of commercial real estate loans "is still meaningful, but declines appear to be slowing."

The analyst rates Fifth Third a "Buy," with a $17 price target, estimating that Fifth Third will earn $1.50 a share in 2013.

 Chart data by YCharts

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


-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $11.95 0.00%
C $37.54 0.00%
FITB $14.87 0.00%
AAPL $93.99 0.00%
FB $102.01 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs