NEW YORK ( TheStreet) -- Fifth Third Bancorp ( FITB) on Thursday said net income rose 19% year-over-year, boosted by lower expenses and improving credit quality. The regional bank, based out of Cincinnati, Ohio, reported a third quarter net income of $421 million or 47 cents per share, compared to $582 million or 65 cents per share in the second quarter and $354 million or 38 cents per share a year earlier. Excluding gains from the sale of Vantiv shares and other non-core items, core third-quarter earnings came in at 42 cents a share, beating the consensus estimate of 41 cents, among analysts polled by Thomson Reuters. Pre-provision net revenue, or the net revenue before provision for credit losses, came in at $655 million, down 28% from the previous quarter but up 15% year-over-year. Adjusted for non-recurring items, pre-provision net revenue was down only 5% sequentially and was up 1% from the prior year. Net interest income rose 2% sequentially but was down 1% year-over-year. Loan growth was sluggish quarter-over-quarter, with total loans rising 0.6%. The net interest margin narrowed to 3.31% in the third quarter, from 3.33% in the second quarter and 3.56% a year earlier. Fee income declined 32% quarter-over-quarter but was up 7% year-over-year. In line with expectations, mortgage production revenues were down 48% from the previous quarter and 40% from a year earlier to $121 million in the third quarter. But the bank managed to partially offset the decline in mortgage banking with higher service charges on deposits and investment advisory income. Excluding Vantiv-related items, non-interest income declined 15% from the previous quarter and 6% from the previous year. The bank aggressively managed costs during the quarter, with total non-interest expenses declining 7% sequentially and 5% year-over-year to $959 million. Third quarter expenses included $30 million in charges to increase litigation reserves. Banks universally are dealing with increasing legal costs, especially related to mortgage litigation. Fifth Third is focusing on reducing expenses in the mortgage business. Asset quality continued to improve, with net charge-offs declining 2% from the second quarter and 31% from the year-ago quarter. The bank released $58 million in loan loss reserves in the third quarter.