Fifth Third Bancorp's second-quarter earnings fell a less-than-expected 78%, as year-earlier results were boosted by a big joint venture-related gain.
"Credit trends remained favorable, reflecting the benefit of our actions to aggressively address problems and continued efforts to improve the quality of originations and proactively resolve credit issues," said President and Chief Executive Kevin Kabat.
Many regional banks have cut their loan-loss provisions recently, leading to improved second-quarter results. Cincinnati-based Fifth Third was hit especially hard during the downturn, having extended commercial real-estate financing to overheated markets, but it has recently seen several credit metrics improve markedly.
Fifth Third reported a profit of $192 million, or 16 cents a share, from a profit of $882 million, or $1.15, a year earlier. The year-earlier quarter included a $1.76 billion gain from the sale of a 51% stake in its processing business to Advent International Corp.
Revenue dropped 56% to $1.51 billion amid the lack of the year-earlier gain.
Analysts polled by Thomson Reuters had most recently forecast earnings of 2 cents on $1.51 billion in revenue.
Loan-loss provisions were $325 million, down from $1.04 billion a year earlier and $590 million in the prior quarter. Net charge-offs, or loans lenders don't think are collectible, fell to 2.26% from 3.08% and 3.01%, respectively. Nonperforming assets, those near default, were 3.87%, compared with 3.48% and 4.02%.
Shares closed at $11.28 Wednesday and were inactive premarket. The stock has risen 61% in the past year.