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TheStreet Open House

Fifth Third Announces Third Quarter 2013 Net Income To Common Shareholders Of $421 Million, Or $0.47 Per Diluted Share

Stock quotes in this article: FITB

Fifth Third Bancorp (Nasdaq: FITB) today reported third quarter 2013 net income of $421 million, compared with net income of $591 million in the second quarter of 2013 and net income of $363 million in the third quarter of 2012. Third quarter 2013 net income available to common shareholders was also $421 million, or $0.47 per diluted share, as there were no preferred dividends paid in the third quarter. After preferred dividends, second quarter 2013 net income to common shareholders was $582 million, or $0.65 per diluted share, and third quarter 2012 net income to common shareholders was $354 million, or $0.38 per diluted share.

Third quarter 2013 noninterest income included an $85 million gain on the sale of Vantiv shares and a $6 million positive valuation adjustment on the Vantiv warrant. Third quarter noninterest expense included $30 million in charges to increase litigation reserves, $5 million in severance expense, and $5 million in large bank assessments for 2012 and 2013 initiated by regulators under the Dodd-Frank Act. Results also included the benefit of a $15 million reduction in the mortgage representation and warranty reserve and a $4 million seasonal pension settlement charge.

Second quarter 2013 noninterest income included a $242 million gain on the sale of Vantiv shares, a $76 million positive valuation adjustment on the Vantiv warrant, and a pre-tax benefit of $10 million resulting from a settlement related to a previously surrendered bank-owned life insurance (BOLI) policy. Second quarter noninterest expense included $51 million in charges to increase litigation reserves and $1 million in severance expense. Results also included $9 million of charges to increase the mortgage representation and warranty reserve.

Third quarter 2012 noninterest income included a $16 million negative valuation adjustment on the Vantiv warrant and $13 million in gains recognized on the sale of certain Fifth Third funds. Third quarter 2012 noninterest expense included $26 million of debt extinguishment costs associated with the redemption of Fifth Third Capital Trust V and Fifth Third Capital Trust VI trust preferred securities (TruPS), $5 million in charges to increase litigation reserves, $2 million of expenses associated with the sale of certain Fifth Third funds, and $2 million of severance expense. Results also included $24 million of charges to increase the mortgage representation and warranty reserve.

Earnings Highlights
                             
For the Three Months Ended   % Change
September June March December September    
2013 2013 2013 2012 2012   Seq   Yr/Yr
Earnings ($ in millions)
Net income attributable to Bancorp $ 421 $ 591 $ 422 $ 399 $ 363 (29 %) 16 %
Net income available to common shareholders $ 421 $ 582 $ 413 $ 390 $ 354 (28 %) 19 %
 
Common Share Data
Earnings per share, basic 0.47 0.67 0.47 0.44 0.39 (30 %) 21 %
Earnings per share, diluted 0.47 0.65 0.46 0.43 0.38 (28 %) 24 %
Cash dividends per common share 0.12 0.12 0.11 0.10 0.10 - 20 %
 
Financial Ratios
Return on average assets 1.35 % 1.94 % 1.41 % 1.33 % 1.23 % (30 %) 10 %
Return on average common equity 12.1 17.3 12.5 11.5 10.4 (30 %) 15 %
Return on average tangible common equity 14.7 21.1 15.4 14.1 12.8 (31 %) 14 %
Tier I risk-based capital 11.15 11.07 10.83 10.65 10.85 1 % 3 %
Tier I common equity 9.89 9.43 9.70 9.51 9.67 5 % 2 %
Net interest margin (a) 3.31 3.33 3.42 3.49 3.56 (1 %) (7 %)
Efficiency (a) 59.2 53.2 59.8 65.2 63.7 11 % (7 %)
 
Common shares outstanding (in thousands) 887,030 851,474 874,645 882,152 897,467 4 % (1 %)

Average common shares outstanding (in thousands):

Basic 880,183 858,583 870,923 884,676 904,475 3 % (3 %)
Diluted 888,111 900,625 913,163 925,585 944,821 (1 %) (6 %)
 
(a) Presented on a fully taxable equivalent basis
The percentages in all of the tables in this earning release are calculated on actual dollar amounts and not the rounded dollar amounts.

“Fifth Third reported solid third quarter results, reflecting our continued focus on revenue generation as well as expense discipline,” said Kevin T. Kabat, Vice Chairman and CEO of Fifth Third Bancorp. “Return on average assets was 1.4 percent and return on average tangible common equity* was 14.7 percent for the quarter including Vantiv-related gains, and were 1.2 percent and 12.6 percent, respectively, excluding them.

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