Fifth Bancorp, which hosts numerous branches across Michigan’s Great Southwest, is out with second quarter earnings this morning for 2020 and their performance has surpassed the expectations and forecasts of Wall Street Analysts for earnings per share while revenues feel in line with analyst projections.
The Cincinnati-based bank today reported second quarter 2020 net income of $195 million compared to net income of $46 million in the prior quarter and $453 million in the year-ago quarter. Net income available to common shareholders in the current quarter was $163 million, or $0.23 per diluted share, compared to $29 million, or $0.04 per diluted share, in the prior quarter and $427 million, or $0.57 per diluted share, in the year-ago quarter.
The bank’s second quarter non-GAAP earnings per share of $0.30 beat Wall Street estimates by $0.09 while their GAAP earnings per share of $0.23 was $0.02 higher than analyst’s had estimated. Revenues at $1.85-billion, down by 3.1-percent year over year was in line with Wall Street.
Greg D. Carmichael, Chairman, President and CEO at Fifth Third says, “Our second quarter performance once again highlighted the strength of our franchise and our ability to navigate the dynamic environment and mitigate the impact of lower rates through well-diversified fee revenues and continued expense discipline. Our CET capital ratio of 9.7-percent and loan-to-core deposit ratio of 75-percent are both indicative of our balance sheet strength which will serve us well during this challenging environment.”
Carmichael reports, “We have now generated year-over-year adjusted positive operating leverage in seven out of the past eight quarters, and also grew tangible book value per share for five consecutive quarters.”
These are some of the key highlights shared by the bank today:
Continue to provide support in response to the pandemic
- Proactive outreach with customers, including those transitioning out of COVID-19 hardship programs
- Originated $5.5 billion in Paycheck Protection Program (PPP) loans to approximately 38,000 small and mid-sized businesses
- Taking measures to ensure continued employee & customer safety and remote workforce productivity
Second quarter 2020
- Pre-provision net revenue up 4-percent from the prior quarter and up 10-percent from the year-ago quarter despite continued rate headwinds…
- Record capital markets revenue…
- Significant improvement in reported and adjusted efficiency ratio compared to both the prior and year-ago quarter…
- NCO ratio lower than low end of previous guidance range…
- 7-percent CET up 35 bps sequentially; exceeds required minimum (including indicative stress capital buffer) by over 270 bps
- Record deposit growth exceeding loan growth, resulting in excess liquidity (loan-to-core deposit ratio of 75-percent)
- IB core deposit costs down 41 bps, more than previous guidance; NIM primarily impacted by excess liquidity (29 bps of the sequential decline); NIM also impacted by decline in market rates
CEO Carmichael says, “We expect credit quality to remain relatively stable in the near-term, reflecting our disciplined client selection, decade-long focus on improving our credit performance in the event of a downturn, and proactive risk management actions. Additionally, our allowance for credit losses continues to incorporate our expectation of a protracted downturn followed by a prolonged recovery period due to the economic fallout from the pandemic.”
Carmichael concludes, “We remain intently focused on taking appropriate action for our customers, our employees, and our communities during these uncertain times. I am very proud of the way our employees have responded to support our customers and each other.”
