3. Fifth Third Bancorp

Company Profile

Shares of Fifth Third Bancorp ( FITB) of Cincinnati, Ohio closed at $11.90 Wednesday, 24% year-to-date. The company owes $3.4 billion in TARP money.

Income Statement

The company reported second net income to common stockholders of $130 million or 16 cents a share, compared a net loss to common stockholders of $72 million or nine cents a share in the first quarter and net income to common stockholders of $856 million or $1.15 a share in the second quarter of 2009, when Fifth Third recorded a $1.8 billion gain on the sale of its financial institutions processing business.

A major factor in the company's second-quarter profit was release in reserves brought about by an improvement in asset quality. Fifth Third's second quarter loan loss provision was $325 million while its net loan charge-offs were $433 million, for a release of $108 million in reserves, however, the company's loan loss reserves were left covering a high 4.71% of total loans.

Balance Sheet

Total assets were $112 billion as of June 30. The nonperforming assets ratio was 3.14%, declining from 3.38% a year earlier. The second-quarter net charge-off ratio was 2.21%.

As of June 30, Fifth Third's Tier 1 leverage ratio was 12.24%, its total risk-based capital ratio was 18.00% and its tangible common equity ratio was 7.79%.

Stock Ratios

Fifth Third's shares trade for 1.3 times tangible book value according to SNL Financial, and 12.1 times the consensus 2011 earnings estimate of 98 cents a share. The forward P/E would drop to 8.5 based on the 2012 consensus estimate of $1.41 in earnings per share among analysts polled by Thomson Reuters.

Analyst Ratings

Among the 21 analysts covering Fifth Third, four have buy ratings, 14 recommend holding the shares and three recommend investors sell the shares.

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