Fifth Third Bancorp (FITB) Misses Q3 EPS by 1c

Fifth Third Bancorp (NASDAQ: FITB) reported Q3 EPS of $0.43, $0.01 worse than the analyst estimate of $0.44.

• 3Q14 return on average assets (ROA) of 1.02%; return on average common equity of 9.2%; return on average tangible common equity** of 11.1%
• Pre-provision net revenue (PPNR)** of $535 million in 3Q14
  • Net interest income (FTE) of $908 million, flat sequentially and up 1% from 3Q13; net interest margin of 3.10%, down 5 basis points sequentially
    • Average portfolio loans of $90.8 billion, up $250 million sequentially and $3.5 billion from 3Q13
  • Noninterest income of $520 million compared with $736 million in the prior quarter; impacted by a $53 million negative valuation on the Vantiv warrant during the quarter; 2Q14 included a $125 million gain on the sale of Vantiv shares and a $63 million positive valuation on the Vantiv warrant
  • Noninterest expense of $888 million compared with $954 million in the prior quarter driven by lower compensation and benefits expense and lower litigation reserve charges
• Credit trends
  • 3Q14 net charge-offs of $115 million (0.50% of loans and leases) vs. 2Q14 NCOs of $101 million (0.45% of loans and leases) and 3Q13 NCOs of $109 million (0.49% of loans and leases)
  • 3Q14 provision expense of $71 million vs. $76 million in 2Q14 and $51 million in 3Q13
  • Allowance for loan and lease losses decreased $44 million sequentially; allowance to loan ratio of 1.56%
  • Total nonperforming assets (NPAs) of $803 million, including loans held-for-sale (HFS), declined $34 million sequentially; portfolio NPA ratio of 0.88% down 4 bps from 2Q14, NPL ratio of 0.68% down 2 bps from 2Q14
• Strong capital ratios*
  • Tier 1 common ratio** 9.64%, vs. 9.61% in 2Q14 (Basel III pro forma estimate of 9.4%)
  • Tier 1 risk-based capital ratio 10.83%, Total risk-based capital ratio 14.34%, Leverage ratio 9.82%
  • Tangible common equity ratio** of 8.84%; 8.64% excluding securities portfolio unrealized gains/losses
• Book value per share of $16.87; tangible book value per share** of $13.95; up 1% from 2Q14 and up 7% from 3Q13
• Repurchased 10 million common shares in 3Q14; incremental impact from 2Q14 and 3Q14 transactions reduced average diluted share count by 10 million in 3Q14

For earnings history and earnings-related data on Fifth Third Bancorp (FITB) click here.

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