Magazine article American Banker

Fifth Third's Profit Falls on Charge for Branch Closures

Magazine article American Banker

Fifth Third's Profit Falls on Charge for Branch Closures

Article excerpt

Byline: Andy Peters

Fifth Third Bancorp in Cincinnati reported a decline in second-quarter profit, as the costs to close branches offset loan growth.

The $142 billion-asset company said net income fell 30% to $292 million, or 36 cents per share, from a year earlier. Despite the decline, Fifth Third is headed in the right direction because loan growth accelerated from the first quarter, Scott Siefers, an analyst at Sandler O'Neill, wrote in a research note.

Net interest income fell 1% to $892 million, as the yield on interest-earning assets fell 25 basis points to 3.28%. The net interest margin fell 25 basis points to 2.9%. Fifth Third said that its move this year to lower the cost of small-dollar consumer loans hurt net interest income.

Average loans and loans and leases rose 2% to $92.7 billion. Commercial and industrial loans, Fifth Third's largest loan category, rose 4% to $42.8 billion, from a year earlier. …

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