October 20, 2022

Though reports show 3rd quarter Fifth Third Bancorp revenue rose 7% from a year ago, adjusted earnings fell shy of expectations. Analysts predicted the downtown Cincinnati-based bank would earn 98 cents per share. Instead, 5^th/3rd posted adjusted third quarter earnings of 93 cents per share.

“The third-quarter earnings report was solid, driven by meaningfully higher net interest income as net interest margins expanded significantly. Loan growth continues to be an operating highlight for this franchise. Expense control was evident with the efficiency ratio improving significantly as Fifth Third’s commitment to technology begins to bear fruit.”

Russell says the bank’s credit quality with improved levels of nonperforming assets was a strength too. “Despite this, management lifted the loan-loss provision to stay ahead of future loan charge-off activity, a conservative approach that many banks are adopting.”

Also, Russell says Fifth Third’s recent 10% dividend increase is “indicative of management’s optimism for continued firm operating trends over the foreseeable future.”

 

 

Jim Russell
Portfolio Manager
jrussell@bahl-gaynor.com

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