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Fifth Third Struggling

Fifth Third Struggling$2.1 billion Q4 production

January 22, 2009

By staff

Fifth Third Bancorp, which halted a number of mortgage programs last year, saw fundings plummet in the second half of last year. Annual earnings deteriorated by $3 billion and quarterly delinquency jumped by 13 basis points.During 2008, mortgage originations were $11.4 billion, the Cincinnati-based institution reported today. Second-half 2008 fundings of $4.1 billion tumbled from $7.3 billion in the first half. But fourth-quarter 2008 originations were $2.1 billion, edging higher than $2.0 billion in the third quarter.

The mortgage servicing portfolio was $40.4 billion at the end of 2008.

Residential mortgage holdings ended last year at $9.4 billion, about the same as at the end of September. Home-equity holdings were $12.8 billion, increasing from $12.6 billion.

Residential delinquency of at least 90 days was 2.11 percent at the end of the fourth quarter, climbing from 1.98 percent three months earlier and 1.76 percent 12 months earlier. Home-equity delinquency was 1.58 percent, climbing from 1.33 percent on Oct. 31 and 1.25 percent on Dec. 31, 2007.

Commercial mortgages outstanding were $12.5 billion on Dec. 31, down from $13.4 billion on Oct. 31. Commercial construction loans owned were $5.1 billion, down from $6.0 billion.

The company reported a $2.1 billion loss during 2008 — far worse than the $1.1 billion profit in 2007.

Fifth Third said it had a fourth-quarter 2008 loss of $2.1 billion, souring from an $0.1 billion third-quarter loss and a profit of less than $0.1 billion a year earlier.

The report indicated that the institution suspended the origination of residential homebuilder and developer loans, commercial non-owner occupied loans and all mortgage broker home-equity loans. It also implemented more stringent underwriting standards..

Fifth Third noted that it sold approximately $3.4 billion in preferred shares to the U.S. Department of the Treasury under the capital purchase program.

The bank said it had 21,476 full-time employees as of Dec. 31, off from 21,522 on Oct. 31.

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