Higher compensation and credit costs drove down quarterly profits at Fifth Third Bancorp in Cincinnati, offsetting revenue gains.
The $142 billion-asset company earned $327 million, or 9% less than a year earlier. Earnings per share were 40 cents, beating an estimate of analysts polled by Bloomberg by five cents.
Salary costs drove profits lower. Noninterest expenses increased 7% to $986 million as the company added staff and began an employee-buyout program.
Fifth Third also boosted its set-aside for bad loans. The provision for credit losses jumped 72% to $119 million because of ongoing deterioration in its energy book.
Net interest income rose 7% to $909 million, while loans grew 3% to $94 billion. The net interest margin expanded 5 basis points to 2.91%.
Fee-based revenue edged up 1% to $637 million.