(By Balaseshan) Fifth Third Bancorp (NASDAQ: FITB) reported a 28% jump in quarterly profit, as non-interest income soared helped by sale of Vantiv shares as well as higher mortgage banking and corporate banking revenue. Results exceeded Street's expectations.
Earnings for the fourth quarter were $390 million or $0.43 per share, up from $305 million or $0.33 per share last year.
Net interest income declined 2% to $903 million, due to lower yields on assets. Sequentially, interest income declined 1% driven by the effect of about $10 million in non-recurring benefits recorded in the last quarter.
Total non-interest income was $880 million, up 60% from last year and 31% sequentially, driven by a $157 million gain from the sale of Vantiv shares as well as higher mortgage banking and corporate banking revenue.
Analysts, on average, polled by Thomson Reuters had expected a profit of $0.41 per share on revenue of $1.65 billion for the fourth quarter.
Net interest margin dropped to 3.49% from 3.67% in the year-ago period, driven by lower asset yields partially offset by higher average loan balances, run-off in higher-priced CDs and mix shift to lower cost deposit products. On sequential basis, net interest margin declined 2 basis points from 3.56%.
Provision for loan and lease losses increased 38.2% to $76 million from last year levels, and rose 16.9% from the previous quarter.
"Our capital plan included the potential repurchase of an additional $125 million in the first quarter of 2013. Given our capacity for internal capital generation, we would expect to continue to return capital to shareholders in a responsible manner, absent unforeseen developments," said Kevin Kabat, CEO of Fifth Third Bancorp.
The stock, which has been trading between $12.04 and $16.16 over the past year, ended Wednesday's regular session at $15.55.