Fifth Third's Mutual Profit Growth

Josef Ray is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Fifth Third Bancorp (NASDAQ: FITB), a diversified monetary services company based in Cincinnati, Ohio, currently manages 15 affiliates with 1,232 wide-ranging banking centers, 106 Bank Mart locations, and 2,213 ATMs in the states of Indiana, Georgia, Florida, Tennessee, West Virginia, and North Carolina, amongst many others.  The company’s commercial banking section provides credit functions, cash management and supervision, financial services, loaning and store products, and foreign exchange finance, capital markets services, and so on.

Its branch banking section offers businessmen and individuals a number of loans, deposits, and lease products that include checking and saving accounts, credit cards, home equity credits, and cash management services.  Its consumer lending section focuses on the advance and home equity lending offerings such as initiation, retention, and services of home equity loans and finances. 

Profiting From the Need of Businesses

On Jan. 17, Fifth Third announced quarterly earnings that stemmed from the gains that the transactions of its shares have brought. Currently, the company’s net revenue available to ordinary investors increased to $390 million, or 43 cents per share for its fourth quarter, which is significantly higher than its previous year’s earnings of $305 million, or 33 cents per share.

The company’s non-interest profits, which take in proceeds from fees and various sources, rose 60% to $880 million as its business has sprung back from the repercussions of financial and housing predicaments that particularly affected the bank’s primary markets in Michigan and Florida. 

According to Fifth Third’s CEO, Kevin Kabat, the rise in quarterly profits marks a firmly gainful year in which the company acquired the second highest rate of net earnings in its history.  Problem loans maintained an upward trend, with charge-offs dropping 6% from the previous quarter, making it the company’s lowest level since the third quarter of the year 2007. 

Fifth Third Bank declared that it has expanded more than $13 billion in current and renewed credit to business clients from October all through December of the previous year. In fact, during 2012 the company loaned approximately $34 billion to various businesses, and remained dedicated to offering credit and financial services that aim to assist businesses in its development and provision of working opportunities.

Jumping Revenue

PNC Financial Services (NYSE: PNC) shares have increased more than 3% in the previous week.  The Pennsylvania-based financial services company has reported net revenue of $719 million in the last quarter of 2012, which is notably higher in comparison to 2011’s net returns of $493 million. PNC’s loans amounted to $186 billion in the fourth quarter, up 2% from the previous year.

The results, which are better than what most market estimates suggested, generally reflect the company’s net interest profits. Lower nonperforming possessions, as well as cut-price charge-offs in conjunction with strong capital levels, were the advantageous points that the company has experienced throughout the past year.  James Rohr, CEO of PNC, asserted that the company would go on with cutting outlay until its interest rates experience a prominent increase, or until it experiences an economic growth rate of 4% to 5%. 

Huntington Bancshares (NASDAQ: HBAN) recently experienced an increased rate of 3.7% upon beating the average produced by Wall Street estimations, conveying a 32% upsurge in profits on account of its enhanced net interest margins and lower loan loss conditions.  Huntington Bancshares’ proceeds went through an increase of 14%, and declared recuperating net charge-offs. 

Growth is Huntington’s greatest prospect, since its accomplishments in the last quarter and throughout the previous year did not seem to disappoint.  The company’s stock price grew at a rate of 3.8%, and it has grown as much as 10.6% in January. In 2011, the company’s overall revenue of $641 million was notably twice its profits in 2010 as the bank started its turn around from the continuous depths of the economic downturn that forced its shares to as low as $1.

The Promising Future of Fifth Third Bancorp

The company has witnessed a far-reaching development in its nonperforming possessions throughout the previous year.  In fact, at the end of the fourth quarter of 2011, the company’s nonperforming asset percentage was 2.23%, which is not appalling, but provides room for improvements.  The bank did just that, lessening the ratio by 74 basis points throughout the course of the previous year, ending it at a rate of 1.49%.

Fifth Third Bancorp recently declared its fourth-quarter earnings, and based on the previous market estimates and reactions, they were undeniably good. Iin spite of a minor decline in both net interest profits and margin, the company was able to manage marking off its profits as significantly better than earlier expectations.  This primarily took place as a result of the bank’s efforts of looking for profits from different banking businesses, which consequently restricted the direct influence of the drop in its net interest earnings. 


JosefRayDagatan has no position in any stocks mentioned. The Motley Fool owns shares of Fifth Third Bancorp, Huntington Bancshares, and PNC Financial Services. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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