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Fifth Third expects more local growth in 2012

Coming off a 41 percent earnings boost in 2012, the Dayton and Springfield markets are expected to contribute to another good year for Fifth Third Bancorp in 2013, said Steve Petitjean, the bank’s Dayton city executive.

As the economy continues to slowly improve and consumer and business confidence improves, Petitjean said, “We do believe that there’s going to be a good uptick in ‘13 and have some specific goals to do that.”

Cincinnati-based Fifth Third, Dayton’s largest bank and Springfield’s seventh largest, recorded profits of $1.5 billion in 2012 available to common shareholders, its second-most profitable year ever. Fifth Third has a 12-state footprint.

Locally, Fifth Third is seeing confidence come back in the marketplace, Petitjean said.

“Our mortgage volume has been incredible from a standpoint of the unit volume. Our loan size maybe isn’t the same size average if you will as Cincinnati or some of our other markets …, but certainly we hold our own,” he said.

“Our loan demand has been steady. We hope to see that grow even more on the commercial and business banking side, but our deposits continue to gain momentum as well as we grow market share year over year,” he said.

Fifth Third is the Dayton metro’s largest bank with deposits of $2.6 billion, a market share that increased this year to 24.2 percent, according to the Federal Deposit Insurance Corp.

Last year was Fifth Third’s best in two years for mortgage activity including purchase and refinances, said Tom Stoll, senior vice president of residential mortgage lending for the Greater Cincinnati affiliate. The bank’s Greater Cincinnati affiliate includes Cincinnati, Dayton, Northern Kentucky and Springfield.

Fifth Third’s total mortgage banking income including fees for mortgage servicing increased more than 40 percent to $845 million for all of 2012, the bank said. Results are not broken down by geographic affiliate.

Refinancing represented about 70 percent of all mortgage activity, Stoll said.

“We’re confident pace continues through the first six months of this year in volume levels and it will be more purchase business,” he said.

And if more people are purchasing mortgages to buy houses, “there’s on average going to be more money spent in the economy and it helps our business customers, commercial customers, retailers. More money gets spent by a homeowner who buys a house than someone who does a refinance to lower their monthly payment,” he said.

With the U.S. presidential election over, banks already saw less uncertainty help year-end loan growth. Once debates pass over the U.S. debt ceiling and sequestration, Dayton’s biggest banks expect a strong last half of 2013.

Fifth Third across its entire footprint issued new loans and renewed credit worth about $34 billion to businesses in 2012, of which about $13 billion, or more than a third, happened in the fourth quarter, the company said.

“The ‘fiscal cliff’ debate in Washington and tax implications … were a primary driver for holding many business decisions into the fourth quarter, including borrowing,” said John Marrocco, head of business banking for Fifth Third in Greater Cincinnati, in an email.

This year, “We may experience a slowdown in growth overall during the first half of the year,” Marrocco said. “If the economy continues to show improvement, lending in the second half of 2013 may mirror the second half of 2012.”

Petitjean said the bank’s biggest challenge here is finding borrowers to put its capital to use.

“We have money to lend. It’s just a matter of trying to match that up with an increased level of demand which we hope to see, as we expect to see some of the uncertainty in the market dissipate,” Petitjean said.

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