Fifth Third Q3 Earnings Off; Yield, Margins Down



Fifth Third reported Q3/14 net income, after preferred dividends, of $328
million, down 22% from $421 million in Q3/13. The bank said noninterest income of $908 million was up from $898 million a year earlier. However, the increase was more than offset by a decrease in noninterest income of $201 million and an increase in provision charges of $20 million. Noninterest expense was $888 million, down 7% from $959 million a year earlier.

The bank noted that its return on average assets was 1.02%, down 25% from 1.35% a year earlier. The Q3/14 net interest margin of 3.10% was down from 3.15% sequentially and 3.31% in Q3/13. The average yield on interest-earning assets in Q3/14 was 3.49% down from 3.53% sequentially and 3.68% one-year ago.

“We were pleased with our operating results in the third quarter that were characterized by strong expense discipline as we endured the effects of the continued low interest rate environment,” said Kevin Kabat, CEO of Fifth Third Bancorp.

“Success in these volatile markets continues to come from managing expenses and growing current earnings while avoiding exposures that do not generate appropriate returns for the risks taken. On all of those fronts, we are doing an exceptional job and creating long term shareholder value. Despite significant elevated competition from banks and non-banks alike, our loan production during the quarter was healthy and within our profitability targets. Deposit growth continues to be very strong as we view the strength of our deposit franchise as the driving force for profitable balance sheet growth in the coming years.”

To view the full Fifth Third news release, click here.


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