Tags: Fifth | Third | Bancorp | FITB

Fifth Third Bancorp in Strong Recovery

By    |   Thursday, 10 Nov 2011 12:26 PM

Regional bank holding company Fifth Third Bancorp (FITB) has continued to show a strong recovery from the financial crisis, solidifying its finances and reporting increasing earnings. The banking sector is not in favor at the moment, but this bank has put together a strong performance streak nonetheless.

Fifth Third Bancorp provides branch banking, consumer lending, commercial banking and investment advisory services through approximately 1,400 branch locations in 12 Midwestern and Southeastern U.S. states. The company's financial reports break the results down into net interest income, non-interest income and non-interest related expenses. The first two added together minus the third item is net income before taxes. Loan loss provisions will go against and reduce this net income amount.

For the third quarter of 2011, Fifth Third Bancorp reported net income of 40 cents per share, up 82 percent from the 22 cents earned a year earlier. The 40 cents was 5 cents better than the 2011 second quarter earnings.

For the full year 2011, the consensus earnings estimate for the company is $1.18 per share, compared to earnings of 63 cents in 2010. The 2012 earnings estimate is $1.40 per share. In three out of the last four quarters, actual earnings have exceeded the consensus by 20 percent or more. The one miss came in with earnings 60 percent below the consensus.

Increasing dividends

In February, Fifth Third Bancorp paid off the $3.5 billion in TARP bailout funds it had received. Once the federal money was paid back the bank was allowed to increase the dividend above a nominal 1 cent per share quarterly. For the first and second quarter of the year, the dividend was 6 cents per share and for the third quarter the distribution was increased to 8 cents.

Prior to the financial crisis the banking company had been paying a majority of net income out as shareholder dividends.

After the third quarter earnings release, the analysts at JP Morgan reiterated their hold rating on the stock and the folks at Sterne Agee reiterated their buy rating. Analysts at Compass Point downgraded FITB to neutral from buy.

The company reports next on Jan. 19.

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Regional bank holding company Fifth Third Bancorp (FITB) has continued to show a strong recovery from the financial crisis, solidifying its finances and reporting increasing earnings. The banking sector is not in favor at the moment, but this bank has put together a strong...
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2011-26-10
Thursday, 10 Nov 2011 12:26 PM
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