CINCINNATI — Regional banking company Fifth Third Bancorp reported Thursday that its third-quarter earnings more than doubled as interest income rose and loan defaults declined.
The Cincinnati-based company reported net income available to common shareholders of $373 million, or 40 cents per share, for the three months that ended Sept. 30.
That is up from $175 million, or 22 cents per share, in the same period a year ago.
Analysts surveyed by FactSet expected, on average, earnings of 33 cents per share. Its shares rose more than 9 percent in afternoon trading.
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The quarter's growth was primarily driven by a 4 percent increase in net interest income from the previous quarter, said Kevin Kabat, president and CEO. Net interest income measures the difference between what a bank makes on lending money and what it costs the bank to borrow money.
"We continue to see business activity in our markets that, while not robust, has been more than sufficient to support solid loan growth and strong earnings results," Kabat said in a statement.
Credit trends continued to improve for Fifth Third as defaults, or charge-offs, dropped 73 percent to $262 million, the lowest level in more than four years, the company said. Charge-offs totaled $956 million in the year-ago quarter.
Kabat told analysts in a conference call that Fifth Third recently made its second dividend increase for 2011. Shareholders at the company's annual meeting in April expressed concerns that dividends had not been increasing enough, given the company's return to profitability.
The banking company operates more than 1,300 banking centers in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania, Missouri, Georgia and North Carolina.