Fifth Third Bancorp 4th-quarter earnings edge down

CINCINNATI (AP) -- Fifth Third Bancorp reported Thursday its fourth-quarter net income fell 2 percent on lower income from fees and investments and expenses to set aside money for a litigation reserve.

The Cincinnati-based company said its net income fell to $383 million, or 43 cents per share, for the three months ended Dec. 31. That compares with earnings of $390 million, or 43 cents per share, a year earlier.

The results edged out analysts' average forecast for 42 cents per share, according to FactSet.

Fifth Third shares slipped 51 cents, or 2.3 percent, to $21.41 in midday trading, close to the high end of their 52-week trading range of $15.43 to $21.96.

Earnings from deposits and loans, or net interest income, rose slightly to $905 million. Earnings from fees and other charges, or noninterest income, fell 20 percent to $703 million.

Fifth Third said overall credit trends were favorable, with fourth-quarter net charge-offs of bad loans at $148 million, down from $109 million in the third quarter and virtually flat with $147 million in the prior-year quarter.

Kevin T. Kabat, Fifth Third's vice chairman and CEO, told analysts in a conference call Thursday that the quarter rounded out a good year for the company despite the low interest rate environment.

"Sources of customer uncertainty related to the economy, budget battles, etc., have diminished, and that makes us hopeful that 2014 will provide a stronger backdrop to economic activity and borrowing than 2013," he said.

Shannon Stemm, a bank analyst with Edward Jones, said Fifth Third and other regional banks face headwinds going into 2014 with the slowness in mortgage banking and the struggle to grow profitability in traditional borrowing and lending amid low interest rates and weak loan demand.

"But we think Fifth Third will be able to combat these headwinds, given the diversification of their business," Stemm said.

Fifth Third operates more than 1,320 banking centers in 12 states: Ohio, Kentucky, Indiana, Michigan, Illinois, Pennsylvania, Missouri, Florida, Georgia, North Carolina, Tennessee, and West Virginia.

The regional banker said its full-year results posted record net income of $1.8 billion for 2013, up 16 percent from $1.6 billion in 2012. Earnings per share rose to $2.02 from $1.66. It also said full-year net charge-offs were down 29 percent, at the lowest levels since 2007.

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Associated Press writer Dan Sewell contributed to this report.

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