Fifth Third Bancorp, which has multiple branch offices across Michigan's Great Southwest, surprised Wall Street in a good way this morning with first quarter earnings that beat analyst's expectations but fell just shy of revenue estimates from the street.
First quarter earnings per share of $0.63 topped Wall Street expectations by $0.04, topping year ago figures by 11-percent, pegged largely to strong loan growth. The street's consensus of $0.59 was beaten, but the same could not be said of their expectations for revenues, which topped $1.65-Billion which fell just short of analysts expectations of $1.66 to $1.74-Billion in the quarter.
Fifth Third is headquartered in Cincinnati and is the nation's 10th largest consumer bank. Today's numbers also mark the fifth consecutive quarter in which the institution has topped analysts earnings per share figures.
Fifth Third Chairman, President & CEO Greg Carmichael says, “Our first quarter performance was strong. Loan growth exceeded our previous expectations, we continued to manage expenses diligently, and credit quality metrics were solid." He adds, “Additionally, we achieved a significant milestone on March 22, 2019, with the closing of the MB Financial acquisition. We are pleased to welcome our new customers and team members. We look forward to converting substantially all systems and processes in May and providing our Chicago customers with expanded products and services."
On March 22, 2019, Fifth Third closed the previously announced acquisition of MB Financial, Inc. That acquisition added approximately $19.8 billion of total assets, $13.5 billion of total loans and leases, $14.5 billion of total deposits, and 91 locations (including 86 full-service banking centers). First quarter of 2019 results reflect the impact of MB Financial since March 22, 2019.
In reviewing the numbers, Carmichael says, “With a strong start to the year, we now look forward to leveraging the enhanced capabilities of our company and expect to achieve our previously stated financial synergies from the transaction, which will meaningfully improve our key profitability metrics," and concludes, “With a clearly defined set of strategic priorities, we remain confident in our ability to generate revenue growth, achieve positive operating leverage, outperform peers through the cycle, and create significant value for our shareholders.”
Fifth Third Bancorp today reported first quarter 2019 net income of $775 million compared to net income of $701 million in the year-ago quarter. Net income available to common shareholders was $760 million, or $1.12 per diluted share, compared to $686 million, or $0.96 per diluted share in the year-ago quarter. Prior quarter net income was $455 million and net income available to common shareholders was $432 million, or $0.64 per diluted share.
Compared to the year-ago quarter, average portfolio loans and leases increased 6-percent, primarily driven by higher commercial and industrial (C&I) and other consumer loans, partially offset by declines in home equity loans and commercial leases. Period end portfolio loans and leases increased 19-percent year-over-year, reflecting the impact of MB Financial. Compared to the prior quarter, average portfolio loans and leases increased 3-percent, primarily driven by higher C&I and commercial mortgage loans, partially offset by declines in home equity loans and commercial leases. Period end portfolio loans and leases increased 15-percent from the prior quarter, reflecting the impact of MB Financial.
Compared to the year-ago quarter, average commercial portfolio loans and leases increased 8-percent, primarily driven by higher C&I and commercial mortgage loans. Compared to the prior quarter, average commercial portfolio loans and leases increased 4-percent, primarily driven by growth in C&I and commercial mortgage loans. Period end commercial line utilization was 38-percent, compared to 35-percent in the year-ago quarter and 36-percent in the prior quarter. The increased utilization rate primarily reflects a greater percentage of middle market clients resulting from the MB Financial acquisition.
Compared to the year-ago quarter, average consumer portfolio loans increased 2-percent, primarily driven by higher other consumer loans and growth in credit card loans, partially offset by declines in home equity loans. Compared to the prior quarter, average consumer portfolio loans increased 1-percent, as higher indirect secured consumer loans and other consumer loans partially were offset by declines in home equity loans.