Fifth Third Bancorp in Cincinnati on Thursday reported a big spike in profits, after selling shares in the payment processor Vantiv.
The $141 billion-asset company earned $657 million, a 71% increase from a year earlier. Diluted earnings per share were 79 cents, missing an estimate of analysts polled by Bloomberg by a penny.
The stock transaction was a boon to Fifth Third's bottom line. The company recorded a pretax gain of $331 million from selling shares, as well as an $89 million pretax gain on warrant actions.
"We have taken important steps towards reducing our direct ownership stake in Vantiv," said Chief Executive Greg D. Carmichael, adding that Fifth Third continues to "hold a significant ownership stake" in the company.
Fifth Third said last month that, after the sale, that it would still own about 18.3% of Vantiv's equity.
Overall, noninterest income — including the stock transactions — rose 69%, to $1.1 billion. Other fee-based lines of business — such as deposit charges and card processing — remained mostly flat.
Net interest income edged up 2%, to $904 million. Loans grew 3%, to $93.5 billion, mostly from higher commercial and construction balances. The net interest margin shrank 11 basis points, to 2.85%.
Noninterest expenses rose 5%, to $963 million, on higher compensation costs, as well as a $10 million contribution to the Fifth Third Foundation.