April 19, 2022

Fifth Third Bancorp posted first quarter adjusted earnings of 69 cents per share, just shy of analysts’ predictions. When compared with last year, first quarter earnings were down 26%; PPP loan payments and pandemic-driven stimulus payments likely contributed to last year’s results. Our Jim Russell told Cincinnati Business Courier reporter Steve Watkins the year-to-year comparison of its earnings is “less meaningful given the one-time nature of those payments and the pandemic. Fifth Third will be judged on current estimates, less so on year-over-year comparisons.”

Russell believes Fifth Third’s results were to be expected given the economic conditions; short-term interest rates rose recently to a point they were higher than long-term rates (a situation known as an inverted yield curve). “Fifth Third’s first-quarter earnings reflect the difficult post-pandemic yield curve environment.” But he says, there are positive signs:  “Commercial loan growth was 8% higher than in the fourth quarter, reflecting strong demand for credit in a reopening environment. Continued strength in loan demand is likely next quarter. Credit quality remains a highlight for Fifth Third and other banks and is aiding profitability.”

 

 

 

Jim Russell
Portfolio Manager
jrussell@bahl-gaynor.com

See the entire article HERE