Saying third quarter performance reflected “continued progress toward achieving our long-term financial targets,” Fifth Third Bancorp President & CEO Greg Carmichael enjoyed an upbeat earnings call Tuesday after reporting net income of $1-billion versus net income of $367-million in the second quarter of 2017 and $516-million in the third quarter one year ago.
The 13th largest commercial bank in the nation, with numerous branches in and around Michigan’s Great Southwest, matched or slightly edged Wall Street analyst’s expectations with profits of $0.48 per share against consensus estimates of $0.47 to $0.48 per share.
Carmichael cited “Higher revenues, disciplined expense management, and solid credit results,” as helping deliver “strong results for our shareholders.”
After preferred dividends, net income available to common shareholders of Fifth Third stock was $999-million, or $1.35 per diluted share, in the third quarter of 2017, compared with $344-million or $0.45 per diluted share in the second quarter of ’17 and $501-million, or $0.65 per diluted share, in the third quarter of last year.
Carmichael says, “Reported results included a substantial gain from the sale of a portion of our ownership stake in Vantiv. That sale also generated an additional stream of future cash flows related to our tax receivable agreement which Fifth Third will potentially receive over many years.” He called the transaction, “consistent with our long standing strategy of thoughtfully reducing our ownership stake in Vantiv over time.”
Carmichael says that during the third quarter the bank also announced multiple strategic relationships, acquisitions, and equity investments “which will enhance our insurance, HR consulting, and payment solutions revenue.”
Looking at the financial returns for investors, Carmichael says, “Our strong capital position has allowed us to both increase our dividend by 14-percent and repurchase nearly $1-billion of shares during the quarter,” adding, “We remain focused on managing for long-term out-performance by strengthening our balance sheet, building profitable relationships while maintaining our disciplined underwriting standards, and returning excess capital to shareholders.”
During Fifth Third’s earnings call with analysts, Carmichael noted, “Today’s reality is that our competition is no longer the bank across the street, but the customers’ last best experience. The bar is continuously rising to deliver a world-class customer experience whether that’s in the branch, on the phone, through the web or on our mobile apps.”
Fifth Third reported expenses were up some 2-percent from the previous quarter, but an even lower 1-percent from the same period a year ago. They like many commercial banks are working diligently to maintain tight cost controls in the low interest rate environment.
