Fifth Third Bancorp in Cincinnati reported a higher third-quarter profit, although the restructuring of a commercial credit cut into the results.
Net income at the $142 billion-asset company rose 12% to $366 million, or 45 cents per share, from a year earlier, according to a news release. The earnings per share beat by five cents the consensus of analysts polled by Bloomberg.
The provision rose 120% from a year earlier, to $156 million, with Fifth Third citing “the restructuring of a student-loan-backed commercial credit originally extended in 2007 … [and] broadening global economic slowdown and associated implications.” The restructuring of the student-loan-backed commercial credit resulted in a $35 million expense.
Total revenue rose 13%, to $1.6 billion.
Total average loans and leases rose 3% to $93.4 billion.
But net interest income fell 0.2% to $906 million. The company cited the scaling back of its deposit-advance product this year, higher interest on long-term debt and "continued loan repricing."
The net interest margin also shrank 21 basis points to 2.89%.
Noninterest income rose 37% to $713 million. Excluding a $130 million positive valuation adjustment on Fifth Third's warrant in Vantiv and an $8 million charge from the valuation of Fifth Third's Visa total return swap, noninterest income rose 3% to $591 million.
Noninterest expense rose 6% to $943 million on higher employee compensation costs. The efficiency ratio improved to 58.2%.