Fifth Third reports residential mortgage loan increase of 10% in Q4

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Fifth Third Bancorp reported earnings today significantly below both last quarter and last year, however, the company did see an increase in its residential mortgages.

Fifth Third’s net income came in at $395 million for the fourth quarter of 2016. This is down 23% from last quarter’s $516 million, and a full 40% from $657 million in the fourth quarter of 2015.

Similarly, diluted earnings per share dropped to $0.49 per share, down 25% from the third quarter’s $0.65 per share and down 38% from the prior year’s $0.79 per share.

However, despite these drastic decreases, the CEO’s message was still positive.

“Our fourth quarter results were strong and reflected our continued commitment to improving shareholder returns,” said Greg Carmichael, Fifth Third Bancorp president and CEO.

“With a balance sheet positioned to benefit from a rising rate environment, effective expense controls, and good credit quality, we achieved solid results during the quarter,” Carmichael said.

Perhaps he was focused on net interest income, which, while flat from last quarter’s $913 million, increased slightly at 1% from the previous year’s $904 million to $909 million in the fourth quarter.

Residential mortgage loans performed even better, increasing 3% from the third quarter’s $14.5 billion to $14.9 billion in the fourth quarter. This is an increase of 10% from 2015’s $13.5 billion. However, this was more than offset by the 13% annual decrease in automobile loans.

Mortgage banking revenue decreased as a whole, down 2% from the third quarter’s $66 million and down 12% from last year’s $74 million to $65 million in the fourth quarter.

However, perhaps Fifth Third’s revenues will improve for the first quarter of 2017 as it is expanding some of its business options. The bank recently announced it is one of the few U.S. banks to offer its customers the ability to use all five major forms of mobile payments. These mobile wallets allow customers to make in-store purchases from their eligible smartphone devices at participating retailers.

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