Thursday, Fifth Third Bancorp (FITB) reported a third quarter loss that widened from a year ago, impacted by higher provisions and a year-on-year decline in interest income.
The Cincinnati, Ohio-based financial services company said after preferred dividends, third quarter net loss available to common shareholders was $159 million or $0.20 per share, compared to $81 million or $0.14 per share in the prior year period. On average, 23 analysts polled by Thomson Reuters expected the company to report loss of $0.17 per share for the quarter. Analysts' estimates typically exclude special items.
Results for the quarter included net benefit of $317 million pre-tax or $0.26 per share after tax related to the sale of Visa, Inc. Class B common shares, while, the year-ago quarter results included net charges of $83 million pre-tax.
Net loss attributable to the company was $97 million for the quarter, compared to a net loss of $56 million a year ago.
In the prior quarter, Fifth Third reported net income available to common shareholders of $856 million or $1.15 per share, which included a pre-tax gain of $1.764 billion related to the processing business transaction with Advent International, a pre-tax charge of $55 million related to the special FDIC deposit insurance fund assessment, and a $35 million benefit recorded as a reduction to preferred dividend expense.
Kevin Kabat, chairman, chief executive officer and president, said, "Results for the third quarter continue to reflect solid core results offset by high credit costs."
Fifth Third's quarterly net interest income declined 18% to $874 million from $1.068 billion in the prior year quarter, while total non-interest income grew 19% to $851 million from $717 million a year earlier. Analysts estimated revenues of $1.6 billion.
Excluding items, net interest income declined by 1% and net interest margin by 5 bps from last year. Third quarter 2008 results included $215 million in loan discount accretion related to the First Charter acquisition compared with $27 million for the latest quarter.
Sequentially, net interest income increased $38 million or 5% from the second quarter of 2009, with net interest margin up 17 bps from the previous quarter.
Kabat said during the quarter the company witnessed significant improvement in the net interest margin, up 17 basis points from the second quarter, which drove a 5% sequential increase in net interest income. Transaction deposits were up 3% from last quarter.
Fifth Third's service charges on deposits of $164 million increased 1% sequentially and declined 4%, when compared to the same quarter last year. Retail service charges grew 1% from the previous quarter and declined 9% compared to year ago quarter.
Corporate banking revenue slipped 13% to $86 million from the previous quarter and 18% from the same period the previous year. Mortgage banking net revenue increased by $95 million to $140 million in the quarter year-on-year and decreased by $7 million from the second quarter 2009.
Investment advisory revenue rose by 1% to $74 million sequentially, but was down 18% from the prior year period. Institutional trust revenue was up 6% sequentially and down 17% from the previous year, while private client revenue increased 4% sequentially and declined 14% year-over year.
Mutual fund fees were down 2% from the previous quarter and 30% from the previous year generally due to continued outflows from long-term equity funds to money market funds. Brokerage fees were down 6% from the second quarter of 2009 and declined 18% from the same period a year ago.
Card and processing revenue was $74 million in the quarter, consisting primarily of interchange from the Bank's credit and debit cards and ATM revenue.
Fifth Third's average loans including loans held-for-sale declined 2 % sequentially and 3% year-on-year owing to lower demand for consumer and commercial loans and leases, as well as higher net charge-offs. Portfolio loan and lease balances decreased 2% sequentially and declined 5% from the third quarter of 2008, while average commercial loan and lease balances decreased 2% sequentially and declined 7% year-over-year. Average consumer loan and lease balances slipped 1% sequentially and declined 3% from a year ago.
The company noted that its average core deposits increased 2% sequentially and 11% from the third quarter of 2008.
The provision for loan and lease losses increased to $952 million for the quarter from $941 million a year ago. The allowance for loan and lease losses represented 4.69% of total loans and leases outstanding as of quarter end, compared with 4.28% last quarter, and represented 125% of nonperforming loans and leases and 122% of third quarter annualized net charge-offs.
Nonperforming assets or NPAs at quarter end were $3.2 billion or 4.09% of total loans and leases, compared to $2.8 billion or 3.48% in the second quarter of 2009. Commercial NPAs at quarter-end were $2.6 billion or 5.56% and increased $350 million or 16% sequentially.
Among the peers, Pittsburgh, Pennsylvania-based PNC Financial Services Group Inc. (PNC) reported a surge in third-quarter profit, helped by strong net interest income and non-interest income growth as well as higher interest margins. Third quarter net income increased to $559 million from $259 million in the previous year. Net income attributable to common stockholders was $467 million or $1.0 per share, compared net income of $248 million or $0.70 per share in the same quarter last year. Total revenues surged to $4.05 billion from $1.65 billion a year earlier. Net interest income of $2.22 billion for the quarter was significantly up from $1 billion in the prior year. Non-interest income grew to $1.83 billion from $654 million a year ago.
Another competitor, Minneapolis, Minnesota-based U.S. Bancorp (USB) reported a 4.7% increase in profit for the third quarter, as revenues grew 26% from last year due to higher net interest income and fee revenue. Net income applicable to U.S. Bancorp rose to $603 million from $576 million in the year-ago quarter. Earnings per share dropped to $0.30 from $0.32 in the previous year quarter. Net income attributable to U.S. Bancorp common shareholders for the quarter declined to $583 million from $557 million in the year-earlier quarter. Total net revenue for the quarter increased to $4.25 billion from $3.38 billion in the same quarter last year. Net interest income for the third quarter grew 9.7% to $2.15 billion from $1.96 billion while non-interest income jumped 48.2% to $2.09 billion from $1.41 billion last year.
FITB is trading at $10.56, up $0.45 or 4.45%, on a volume of about 20.83 million shares. In the 52-week period, the stock moved between $1.01 and $12.95, on an average 3-month volume of about 23.54 million shares.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.