Fifth Third: The Good, The Bad & The Ugly

This week's "The Good, The Bad & The Ugly" from BankRegData.com reviews Fifth Third Bancorp.

Fifth Third (FITB)
is a diversified financial services company headquartered in
Cincinnati, Ohio. They operate over 1,300 branches with $110.8 Billion
in Assets and $85.6 Billion in Deposits.

The data
for the following tables and charts comes from the FDIC Call Reports
and the spot review is not intended as advice. BankRegData holds no
positions in any bank stocks nor has financial backing from any
institution.

The Good: Nonperforming Loans

Fifth Third has seen a nice drop in their Nonperforming
Loans from 4.92% to 4.54%. While they still rank in the 67th percentile
relative to their peers they have made a noticeable improvement. NPL is
defined as 90+ Days Past Due plus Nonaccrual Loans. Where the
improvement is coming from:

  - Commercial & Industrial is running 2.57% v. 2.90% the prior quarter

  - Commercial RE is at 5.21% v. 5.72% the prior quarter

  - Construction & Development is "down" to 18.60% v. 19.05% for their peers

Trouble spots include:

  - 1-4 Family 1st Liens is up across time and worse than peers

  - Credit Card Loans are running 7.37% v. 6.49% last quarter

The Bad: Restructured Loans

FITB has restructured $1.428 Billion in loans which is
1.81% of their loan base (versus 0.66% for similar sized peers). This
high of a restructured percentage places them in the 92nd percentile
relative to their peers. In other words, only 8% of similar sized banks
have restrucutured more of their loans.

Of the $1.428 Billion, $1.174 Billion (82.17%) of the restructured loans are 1-4 Family Residential.
Fifth Third has restructured 5.60% of their total 1-4 Family
Residential loans versus 0.88% for their peers which places them next
to last - only Doral Holding, L.P. is worse.

The Ugly: Net Operating Income reliance on Loan Sales

Starting in Q1 2009 Fifth Third ramped up their Loan Sales and began
generating significant Non Interest Income gains. They have been using
these extraordinary gains to prop up their Net Operating Income:

In 4 out of the last 5 quarters FITB has generated over $100+ million
in Non Interest Income from gains on Loan Sales. These gains have
covered charge off losses on several loan portfolios and artifically
helped earnings.

Shameless Plug: Each week BankRegData.com reviews a financial insitution and breaks down a few metrics. Once again, BankRegData holds no positions in any bank stocks nor has financial backing from any institution. If you'd like to receive the weekly e-mail please send a request to [e-mail].

Comments

[bingaling]

Nice article - The good really isnt that "good" it is like looking at a pile of poop and finding the place that smells the least .

The stock follows the Dow w/ extreme bias (example Dow up 1% stock goes up 3-4% -dow drops 1% stock drops 3-4 %.) .

It's loans are in areas that are more risk adverse to an economic downturn than other banks as well .

And finally they need to pay back Tarp funds .

This stock needs the macro economic picture to be healthy in order to continue to perform as it has in the past otherwise it is a pig with lipstick IMO. It has outperformed many "better" peers and will probably continue to do so if the macro economic picture can continue to be painted as a "recovery".

[Lucky Guesst]

Thanks, that is my bank.

Also in Cincinnati today......

http://www.youtube.com/watch?v=rGTBFPte-MY

[JW n FL]

Very nice job putting all of the numbers together!

http://www.fdic.gov/bank/historical/bank/index.html

Could be a Great! reason why people would want to keep up?

Or if they desire the 100% returns YOY, Quality Bank(s) could enable some nice earnings... although here you will find that the bulk of the readship is waiting for the end, which is too say... that Paper Money, Paper Stocks and / or FIAT anything is Bad, could be the work of the Devil. Maybe you will better understand the crickets chriping in here... anything but Precious Metals is a waste of time and money, thats the demo-graphic here as cultivated by Danny Boy!

Bill, I will once again say bang up job and keep up the Great Work! Don't let the end is near crowd, hold you back for getting the quality of your work out to the masses.

[Mark Beck]

Warning:

Do not trust the accounting data from any bank! Loss is not recognized until it is absolutely necessary, and in the process, can be offset with a SIV of some type, which move around before and after the quarterly results. Also, many banks were able to complete sales of bad MBS through the GSEs to the FED by the end of Q1. So there should be some strengthening do to the movement of bad debt.

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In looking at Q1 for many banks, and listening to the press conferences, it was clear that many were very proud of making huge profits in equities. The investors who have followed banks for decades were happy with the performance for their customers.

However, more importantly, amused that given the leverage, that the exposure to equity volitility is not a strength. So the trained eye was looking for the true capitialization of the bank, now with the new dynamic of equity volitility.

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Everybody with experience in traditional banking profits and balance sheets, were waiting for some common sense from the executives in putting forth a viable plan moving forward without obvious liquidity props from the government. It did not happen.

Mark Beck

[Ripped Chunk]

And the news content here is????

Anyone who believes a bank FS or buys a bank stock deserves to be clobbered, euthanized, vaporized, whatever the fuck.

[jswede]

this is outstanding content.   gives a graphical up-to-date of how far along a given bank is in the process of 'coming clean' - absolutely relevant, especially when applied to non-"official" data and trading accordingly.

[Grand Supercycle]

As mentioned earlier, EURUSD and EURJPY daily charts give bullish warnings.

http://stockmarket618.wordpress.com