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Fifth Third Balance Sheet Moves

It will take a charge.

Fifth Third Bank

(FITB) - Get Fifth Third Bancorp Report

is taking a fourth-quarter charge of $325 million, or 58 cents a share, in order to reposition its balance sheet.

The Cincinnati company, which has $105.8 billion in assets, says it is selling $11.5 billion in available-for-sale securities, reinvesting $2.8 billion in available-for-sale securities, reducing its wholesale borrowings by $8.7 billion and terminating $1.1 billion of repurchase and reverse repurchase agreements.

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Fifth Third also plans to add interest rate derivatives which are expected to reduce net interest income by $40 million and reduce net interest margin by 5 basis points.

Fifth Third's actions should add approximately 30 to 35 basis points to its net interest margin next year and improve net interest income by $70 to $80 million in 2007.

The company expects earnings this year to range between $2.07 and $2.09 per share. Analysts were estimating $2.68 a share.

Shares of Fifth Third fell 36 cents, to $40.50 in aftermarket trading.