Fifth Third Bancorp (FITB) expects its loan charge-offs to increase in the third quarter, primarily due to the increase in charge-offs associated with the Shared National Credit (SNC) examination that has been recently conducted by regulators.

"The company, which intends to release its third-quarter earnings results on Oct 22, also expects its non-performing assets to accelerate, though interest income and margins are expected to improve in the second half of 2009.

Fifth Third expects net charge-offs in the third quarter to be approximately $775 million, up from $626 million in the second quarter. This would include approximately $110 million in net charge-offs related to SNC credits, compared with $17 million in the second quarter. However, management expects SNC charge-offs to fall in the fourth quarter. Non-performing assets are also expected to increase 20%.

The weakness in the overall economy and in the real estate market, including specific weakness within Fifth Third's

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Fifth Third Bancorp (FITB) is planning to acquire banks with the assistance of the Federal Deposit Insurance Corporation (FDIC). The company intends to expand within its operating footprint instead of venturing beyond that. While the company has already evaluated some of the FDIC-assisted purchases, the deposit mix was neither suitable nor large enough. The company intends to acquire such banks with the FDIC’s assistance, which would significantly increase its market share in one or more markets. Fifth Third already has the experience of acquiring such troubled banks. Last year, the company completed the conversion of Bradenton-based Freedom Bank, which bank regulators had declared insolvent on Oct. 31, 2008 and the FDIC was named the receiver. Fifth Third Bank assumed approximately $250 million in failed Freedom Bank’s deposits from the FDIC. The transaction gave Fifth Third approximately $685 million in deposits in the Bradenton-Sarasota-Venice Metropolitan Statistical ...

For Immediate Release

Chicago, IL – September 17, 2009 – Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include D.R. Horton (DHI), KB Home (KBH), Pulte Homes (PHM), Allstate (ALL), Hartford Financial Services (HIG), Travelers (TRV), Loews (L), Humana (HUM), Stericycle (SRCL), C.R. Baird (BCR), Celgene (CELG), Gilead Sciences (GILD), Anadarko Petroleum (APC), EOG Resources (EOG), AK Steel (AKS), Nucor (NUE), U.S. Steel (X), Fifth Third (FITB), Regions Financial (RF), Suntrust Banks (STI) and Zions Bancorp (ZION).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This week: Third-Quarter Earnings Forecast

Though the economy has stabilized, third-quarter results for the majority of companies will still be below year prior levels.

Per share profits for the S&P

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Though the economy has stabilized, third-quarter results for the majority of companies will still be below year prior levels.

Per share profits for the S&P 500 are projected to fall 15.4%. The median company is forecast to report a 14% drop in per share earnings. (The difference being that the S&P 500 forecast is a weighted projection.) More than 340 companies may have experienced a year-over-year drop in profits.

On a revenue basis, things are not much better. Median company sales are forecast to have dropped 7.2%.* More than 360 companies are expected to report a year-over-year drop in earnings.

It's important to realize that during July and August 2008, the economy was in fairly good shape. Lehman did not collapse until September 2008. Furthermore, the credit crunch's grip severely tightened over the 2-month span of September and October 2008. As a result, many companies are now facing tough

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When you invest in a stock, one of the best things you can see is analysts raising their expectations about what the company is going to earn for the current fiscal year. There are several ways of measuring this, but the following is a list of the companies with the biggest increases in their consensus earnings expectations for this year over the last month.

To make the list, a company had to have a current mean (average) estimate of over 50 cents, be a member of the S&P 500 and have at least three estimates for this year. The 50-cent restriction was put in to prevent small dollar changes that are huge percentage moves from dominating the list (going from a penny expected to a nickel). Having 3 or more estimates also helps insure it was not a fluke. The S&P 500 restriction was put in to make sure we

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The Case Schiller home price data looks to be much better than I expected. The data is for May, and relative to April the composite 10 index rose by 0.41%, while the composite 20 index was up 0.45% -- on a not-seasonally adjusted basis! There is some seasonality to the data, however, and when the seasonal adjustments come into play the C-10 fell by 0.21% and the C-20 was down by 0.16%. Still, this is a substantial decline in the pace of deterioration, with the C-10 down at an annualized rate of just 2.5% for the month and the C-20 falling at just a 1.7% rate. Compare this to the year-over-year rate of decline (including the May data) showing a 16.8% decline for the C-10 and a 17.1% decline for the C-20. Some of the individual city data was interesting, and since the season affects all cities at ...

Last fall Fifth Third Bancorp (FITB) sold $3.4 billion worth of preferred shares to the U.S. Department of the Treasury under the Treasury's Capital Purchase Program.

Management is not considering paying back the funds until the economy improves. The weakened economy has led to a 3% decrease in average commercial loans on both a sequential and year-over-year basis. Furthermore, average consumer loans were down 2% sequentially and down 1% on a year-over-year basis.

In the recent quarter, Fifth Third raised $1.4 billion of equity capital. These events have improved capital ratios with Tier 1 capital ratio rising to 12.90%, compared to 10.93% last quarter and 8.51% last year.

The credit environment remains challenging and we expect further deterioration in the performance of the company's loan portfolio in the near term. Continued deterioration in the residential real estate book and the related exposures in commercial real estate, notably homebuilders and developers were

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Republicans on Capitol Hill have become increasingly vocal in calling the stimulus package a failure. Is there any validity to their opinion? While it's difficult to talk about any government program without invoking political biases, it is a good question to ask. When the stimulus package was passed, one of the primary criticisms -- outside of the dollar amount -- was that too much of it was geared towards 2010 rather than having an immediate impact. Still, parts of it did have a short-term impact such as the reduction in taxes and lengthened unemployment benefits. Perhaps the best measure of judgment is the economy, which is both worse and better than it was when the stimulus package was passed.   The pace of contraction has slowed dramatically. The overwhelming majority of economic indicators are headed in the right direction. But the economy is still headed downhill. ...

For Immediate Release

Chicago, IL - June 25, 2009 - Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week's analysis include Stericycle (SRCL), Quest Diagnostic (DGX), Biogen Idec (BIIB), AmeriSourceBergen (ABC), Abbott Labs (ABT), Sunoco (SUN), Tesoro (TSO), AK Steel (AKS), Nucor (NUE), United States Steel (X), Fifth Third (FITB), First Horizon National (FHN), Zions Bancorp (ZION), Suntrust Banks (STI), Franklin Resources (BEN), AllianceBernstein Holding (AB), Texas Instruments (TXN), National Semiconductor (NSM) and Micron (MU).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This Week: Second-Quarter Earnings Outlook

Second-quarter earnings will be ugly.

Median EPS is projected

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Second-quarter earnings will be ugly.

Median EPS is projected to drop 21.2%. Nearly 75% of S&P 500 members are forecast to report earnings that are lower than a year ago. 62 companies are projected to have lost money.

These numbers are not unexpected given that we remain in the midst of a recession. They could even prove to be too pessimistic given the propensity of companies to surprise and the relative improvements in economic conditions.

Growth Industries

The one sector projected to show the strongest growth is also the one with the highest political risk - Medical. The majority of medical care providers, health insurers, pharmacy benefit managers and drug companies should report a year-over-year increase in profits.

Zacks #2 Rank ("buy") stocks expected to report growth include Stericycle (

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