Fifth Third Bancorp posted a wider third-quarter loss as the Cincinnati-based regional bank reported an 18% drop in interest income.
Shares were down 1.6% premarket to $9.95 as the loss was wider than expected.
Although some big banks have been posting strong results for the most recent period, regional banks don't have the same level of capital-markets activity to offset weak traditional banking, which will remain under pressure until serious improvement in the economy and joblessness.
Fifth Third has been paying the price for expanding its commercial real-estate financing to overheated markets. It has exited some troubled sectors and tightened its lending standards, but credit problems have remained.
Fifth Third posted a loss of $97 million, or 20 cents a share, compared with a year-earlier loss of $56 million, or 14 cents. Analysts polled by Thomson Reuters predicted a 17-cent loss.
Tier 1 capital ratio, a key measure of financial strength, rose to 7.03% from 5.18% a year earlier and 6.94% in the previous quarter.
The provision for loan losses rose to $952 million from $941 million year earlier but fell from the previous quarter's $1.04 billion. Net charge-offs, loans the bank doesn't expect to collect, rose to 3.75% from 2.17% and 3.08%, respectively.
Average core deposits were up 6% from a year earlier while loans dropped 5%.