By Rob Curran
Fifth Third Bancorp's earnings rose 17% in the fourth quarter as an increase in interest income offset a sharp drop in mortgage revenue where the 2024 jump in home-loan rates took its toll.
The Cincinnati bank holding company posted a net profit of $620 million, or 85 cents a share, up from $530 million, or 72 cents a share, a year earlier. Analysts surveyed by FactSet had forecast GAAP earnings of 88 cents a share, according to FactSet.
Excluding 5 cents a share of certain one-off charges, Fifth Third's adjusted earnings were 90 cents a share, topping the average analyst forecast of 87 cents a share, as per FactSet.
The lender booked a provision for credit losses of $179 million during the quarter.
Net interest income rose 1.5% to $1.44 billion, in line with the average analyst estimate, as per FactSet.
Noninterest income fell 16% to $732 million, as revenue from mortgages plunged 14%. A spike in mortgage rates during 2024 has weighed on home sales and mortgage issuance throughout the U.S. Analysts had called for noninterest income of $768 million, according to FactSet.
Noninterest expense fell 16% to $1.23 billion as the bank paid out lower compensation and benefits. The period during the prior year included one-off noninterest expenses such as a Federal Deposit Insurance Corporation assessment.
Net interest margin rose to 2.97% from 2.85% a year earlier. Bank profitability often depends on the spread between the interest earned on long-term loans and investments and the interest paid out on deposits and short-term funding. Fifth Third said it was able to reduce interest-bearing liabilities costs by 34 basis points, which more than offset a 10 basis-point decrease in interest-earning assets yield and a $4.7 billion reduction in interest-earning assets.
The bank's net chargeoffs were $136 million, below the average analyst estimate of $142 million, as per FactSet.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
January 21, 2025 07:11 ET (12:11 GMT)
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