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Thursday, December 12, 2002

What's the Buzz?


Fifth Third back in good graces

Shares of Fifth Third Bancorp jumped Wednesday, after the Cincinnati banking giant said it has found no other accounting discrepancies in addition to those that forced it to take a $54 million after-tax write-off in the third quarter.

The stock closed up 75 cents at $60.45 Wednesday. Tuesday, the company disclosed in a regulatory filing that it and outside auditors have reviewed more than 97 percent of transactions that caused it to take the impairment charge tied to processing securities in treasury-related accounts.

The blunder prompted the Securities and Exchange Commission, the Federal Reserve Bank of Cleveland and the Ohio Department of Commerce to launch an informal investigation last month. The issue involves investments that the bank made through its treasury operations, not customer accounts.

Based on its reviews, Fifth Third said there are no additional significant financial discrepancies. It and third-party experts said the actual cost might be lower, and it might be able to recover much of the loss. The "third-party experts" were not identified

Jennifer Thompson of Putnam Lovell NBF in New York raised her rating on Fifth Third's stock to "outperform," saying Tuesday's disclosure lifted a cloud over the bank's shares. Regulators have not wrapped up their investigation, but the latest disclosure sends a signal that the probe might end soon.

Jeff McKinney



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