At least one Wall Street brokerage termed it “a notable positive earnings surprise of 10.5-percent” in the second quarter as Fifth Third Bancorp, with multiple bank branches scattered across the landscape of Michigan’s Great Southwest topped the street’s expectations Wednesday.
Fifth Third Bancorp has reported second quarter 2018 net income of $586 million versus net income of $704 million in the first quarter of 2018 and $367 million in the second quarter of 2017. After preferred dividends, net income available to common shareholders was $563 million, or $0.80 per diluted share, in the second quarter of 2018, compared with $689 million, or $0.97 per diluted share, in the first quarter of 2018, and $344 million, or $0.45 per diluted share, in the second quarter of 2017.
Fifth Third Chairman, President & CEO Greg Carmichael says, “We had a very productive second quarter and remained focused on achieving our long-term objectives.” He adds, “Our quarterly results were very strong, as evidenced by the continued expansion in our net interest margin, lower operating expenses, record capital markets revenue and another very significant decline in the level of criticized assets. Our commercial middle market loan originations were also very strong and we expect this trend to continue over the remainder of the year.”
Carmichael says that during the quarter, Fifth Third continued to execute on expense initiatives and also took further actions to optimize the branch network, saying, “We are very excited about reallocating our resources to grow branches in high-growth markets which should significantly boost household growth.” He notes, “I am confident that these decisions are in the best long-term interests of our shareholders. We remain focused on achieving our enhanced profitability targets.”
Fifth Third also announced during the second quarter their acquisition of MB Financial, which Carmichael contends, “Will create a leading retail and commercial franchise in the attractive Chicago market.” He says, “We are purchasing a well-respected and successful bank, and combining forces will allow us to build scale in the strategically important Chicago market. Since the announcement in May, we have made significant progress in finalizing the composition of the management team in Chicago. We are very confident that the talent we have in place will help us achieve the financial outcomes that we discussed during the announcement. We are looking forward to completing the merger as soon as possible so that we can begin realizing the substantial cost and revenue synergies we have identified.”
Looking to the future, Carmichael says, “Over the next four quarters, we expect to return a significant amount of capital through a 33-percent increase in our quarterly common dividend and a 42-percent increase in share repurchases compared to last year’s capital plan.”
