Fifth Third 3Q net income falls on charges

CINCINNATI — Fifth Third Bancorp reported Thursday that its third-quarter net income fell because of one-time expenses related to debt repayment and accounting issues.

Still, the Cincinnati-based bank reported improving lending business trends, and beat analysts’ expectations for revenue while missing earnings projections by only a penny.

Fifth Third’s net income available to common shareholders fell to $354 million, or 38 cents per share, from $373 million, or 40 cents per share, a year earlier.

The results include charges of $26 million for repaying debt, $16 million to reflect an investment’s lower value and $24 million set aside to repurchase bad mortgages.

The bank’s revenue rose to $1.58 billion from $1.57 billion in the third quarter of 2011. Analysts polled by FactSet had expected earnings of 39 cents per share on revenue of $1.57 billion.

CEO Kevin Kabat said corporate banking and mortgage banking revenue both grew in double digits, and portfolio quality continued to improve. Credit trends got better, with net charge-offs, or loans written off as uncollectable, down to $156 million, the lowest level in five years. They were $181 million in the previous quarter and $262 million in the third quarter one year ago, and the bank said past-due loans were also declining.

“Results reflect our strong support of customers and communities in the midst of a relatively weak economic recovery,” Kabat said in a statement. He said the company is well-positioned to compete in the current environment.

Fifth Third has been rebounding from the housing market slump in key states such as Florida and Michigan.

Fifth Third shares rose 13 cents to $15.13 a share in premarket trading. They have traded in a 52-week range of $10.89 to $16.16.

The bank has $117 billion in assets and operates 1,320 banking centers in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania, Missouri, Georgia and North Carolina.