FITB Fifth Third Bancorp

By Austen Hufford 

Fifth Third Bancorp said profit in its fourth quarter jumped as it recorded gains from the sale of some of its stake in payment-processing firm Vantiv Inc.

Results beat Wall Street expectations.

The Cincinnati-based regional bank reported a profit of $657 million, up from $385 million a year earlier. Per-share earnings rose to 79 cents from 43 cents. Revenue, a combination of net interest income and noninterest income, increased 30% to $2 billion.

The company brought in extra revenue during the quarter from the secondary offering of shares from Vantiv and other agreements with the company. Formerly known as Fifth Third Processing Solutions, Vantiv was spun out from Fifth Third in 2009 and went public in 2012. Fifth Third said the move reduced volatility associated with warrants with the payment processor.

Fifth Third recorded a gain of $331 million on the shares. When adjusted for the one-off transactions, revenue increased 1.8% to $1.53 billion.

Analysts had estimated 40 cents in earnings per share and $1.52 billion in revenue, according to Thomson Reuters.

For years, banks have faced historically low interest rates following the financial crisis. In December, the Federal Reserve raised its benchmark rate slightly and signaled it would gradually lift rates as the economy strengthens. The interest rates banks charge on many loans are directly tied to the Fed's target rate, meaning they could earn more interest from them. Fifth Third Chief Executive Greg Carmichael said uncertainty remains.

"We view the Fed's December rate move as a positive first step towards a normalized environment but there is uncertainty around the extent and timing of the future rate decisions," Mr. Carmichael said.

The bank set aside $91 million for loan and lease losses, a decrease from $99 million a year earlier.

Excluding the Vantiv transactions, noninterest income increased 1.8% from a year ago, driven by an increase in mortgage-banking revenue but hurt by a decrease in corporate-banking revenue.

Fifth Third's net interest margin, a measure of lending profitability that is tied to interest rates, fell to 2.85% from 2.89% the previous quarter and 2.96% a year earlier.

Noninterest expense in the quarter increased 4.9% due to a contribution to the company's charity and higher compensation and occupancy costs. Commercial loans increased 5.3% to $57.17 billion while consumer loans decreased 0.9% to $36.43 billion from a year prior.

Shares, down about 9.6% in the past three months, were inactive premarket.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

January 21, 2016 08:18 ET (13:18 GMT)

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