Fifth Third 3Q net income falls on charges




The results include charges of $26 million for repaying debt, $16 million to reflect a lower value in its investment in the payment processor Vantiv Inc. _ a publicly held company _ and $24 million set aside to repurchase bad mortgages.



Kabat told analysts Thursday that loan continued to grow in most categories, and he expects loan growth "to be a bit stronger in the fourth quarter as we close in on year-end and the (presidential) election moves behind us."

Fifth Third reported residential mortgage loans were up 16 percent and commercial and industrial loans were up 15 percent, compared with last year.

Earnings from deposits and loans, or net interest income, rose 1 percent to $907 million from $902 million a year ago, and Kabat said the interest-rate environment remains extremely challenging.

Kabat said that, overall, Fifth Third expects to produce "similarly strong results in the fourth quarter" and that Fifth Third's ability to generate capital gives it the capital needed "to support balance-sheet growth while continuing to return capital to shareholders in a prudent manner."

Shareholders have said they want to see higher dividends.

The company last month announced an increase in the cash dividend paid on common shares from 8 cents to 10 cents per share.

Matthew McCormick, portfolio manager and banking analyst with Bahl & Gaynor Investment Counsel, said Fifth Third had "a solid release overall and management did a better job of maintaining net interest margins than their peers."

Net interest margin measures the difference between a bank's interest income and the amount of interest paid out to its lenders, relative to the bank's assets.


Fifth Third shares closed down a penny at $15.12. They have traded in a 52-week range of $10.89 to $16.16.



AP writer Dan Sewell in Cincinnati contributed to this report.