Fifth Third Q1 Earnings Hurt by Energy Loan Related Provisioning

Fifth Third Bancorp reported Q1/16 net income, after preferred dividends, was $312 million compared to $346 million in Q1/15.

The following highlights were excerpted from the news release:

  • Average commercial leases for the Q1/16 period end of $3,874 million was up 4% compared to $3,715 million at the end of the same period in 2015.
  • Provision for Q1/16 loan and lease losses of $119 million was up 72% from $69 million in the same quarter one year earlier. The bank noted higher net charge-offs in Q1/16 which included $9 million in the energy portfolio and related oil field services loans. As of March 31, 2016, the reserve allocated to the energy portfolio was approximately 6.20%, up from approximately 4.75% last quarter.
  • Nonperforming C&I loans (NPLs) as of March 2016 of $278 million was up from $61 million in March 2015. The bank noted the increase reflected a $168 million increase in NPLs associated with its reserve based lending (RBL) energy portfolio and the impact of low oil prices.

“First quarter results were strong despite significant market volatility,” said Greg D. Carmichael, president and CEO of Fifth Third Bancorp. “Our net interest income increased from the fourth quarter, reflecting the benefit of the Fed’s December rate hike on loan yields. In addition, we had very strong results this quarter in our fee generating businesses. At the same time the results also highlight our focus on expense management. We remain cautious about the economic outlook and are continuing to look to drive better near term performance without relying on higher interest rates.”

Like this story? Begin each business day with news you need to know! Click here to register now for our FREE Daily E-News Broadcast and start YOUR day informed!

Leave a comment

View Latest Digital Edition

Terry Mulreany
Subscriptions: 800 708 9373 x130
Susie Angelucci
Advertising: 484.459.3016

View Latest Digital Edition

Visit our sister website for news, information, exclusive articles,
deal tables and more on the asset-based lending, factoring,
and restructuring industries.