Fifth Third Bancorp: Financial Winner
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Fifth Third Bancorp's shares have now returned 12% year-to-date, after declining 11% last year.
The shares trade for 1.2 times their reported June 30 tangible book value of $11.89, and for nine times the consensus 2013 earnings estimate of $1.52 a share, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $1.58.
Based on a quarterly payout of eight cents, the shares have a dividend yield of 2.26%.
Fifth Third last Thursday reported second-quarter earnings available to common shareholders of $376 million, or 40 cents a share, declining from $421 million, or 46 cents a share, during the first quarter, when the company realized after-tax benefits of roughly $82 million, or nine cents a share, from the spinoff of its Vantiv (VNTV) payment processing subsidiary. Second-quarter earnings increased slightly from a year earlier.
During the second quarter, Fifth Third realized after-tax gains of $36 million, or four cents a share, on the sale of Vantiv shares.
Fifth Third's second-quarter return on average assets (ROA) was 1.32%, declining from 1.49% in the first quarter, but increasing from 1.22% in the second quarter of 2011. The second-quarter return on average common equity (ROE) was 11.4%, declining from 13.1% the previous quarter, and increasing from 11.0% a year earlier.
The Federal Reserve in March rejected Fifth Third's plan to increase its dividend, while allowing the company to repurchase $1.4 billion in trust preferred securities and repurchase common shares in amounts equal to after-tax gains from the Vantiv sale. Fifth Third submitted a revised capital plan to the Federal Reserve in June, saying its plans to return capital to investors were "substantially similar" to the earlier plan.