A strong third quarter "despite the tepid economic environment" has Fifth Third Bancorp delivering improved returns to shareholders, even as their new Project North Star sets the stage for more of the same for the long-term. That's the brief assessment delivered by Fifth Third President and CEO Greg Carmichael.
Carmichael says "Higher net income, stable underlying fee revenue, and lower expenses helped us achieve improved returns for our shareholders." Those returns include a 37-percent growth in net income available to common shareholders to $501-million. That checks in at $0.65 per diluted common share.
Carmichael reports that "During the quarter, we executed on several initiatives which will help us continue to drive improved shareholder returns. While we continue to invest in areas like technology, we plan to improve our operating leverage through an ongoing review of expenses in all business units and staff functions and re-negotiations of key vendor contracts." Carmichael also points to Fifth Third's plan announced last month to sell and consolidate certain bank branches which will generate additional operating efficiency.
The Cincinnati-based Bancorp which boasts many branches in and around Michigan's Great Southwest is also looking to long-term successes. Carmichael says, "We remain focused on improving our profitability without relying on the expectation that economic conditions will improve." He reflects on the institution's recent launch of Project North Star, which Carmichael says, "has aligned the entire organization toward reaching this objective. Through Project North Star, controlled expenses, opportunities to enhance fee revenue, and actions to optimize the balance sheet should help us achieve our long-term financial targets."
Today's third quarter results show a return on average assets of 1.44-percent, a return on average common equity of 12.8-percent, and a return on average tangible common equity of 15.2-percent. Additionally, pre-tax income of $694-million and pre-provision net revenue of $774-million are reflected in the financial reports filed today.
Fifth Third reports average 3Q portfolio loans and leases of $93.5-billion, an increase of $138-million from the same quarter last year. A $240-million accelerated share repurchase transaction initially settled on August 5th resulted in a reduction of 11 million common shares outstanding during the quarter.
Fifth Third Bancorp's book value per share of $20.44 is up 2-percent from the previous quarter and 12-percent from the same quarter in 2015.
