By Jeff McKinney
The Cincinnati Enquirer

Fifth Third Bancorp will take a write-off for the second quarter to cover an expense as well as a rise in problem loans but didn't say how much it will affect earnings.

The Cincinnati banking giant also said it will benefit from the recovery of a portion of a $54 million after-tax charge that it took in last year's third quarter to cover some accounting errors in its treasury unit.

While Fifth Third expects single-digit gains in net interest income this quarter, its ties to the airline industry likely will mean more loan losses in the April-June period, according to its latest 8-K filing with the Securities and Exchange Commission.

The parent of Fifth Third Bank also said it will realize a second-quarter expense related to the early retirement of about $200 million of Federal Home Loan Bank advances. The bank could not say what that charge might be.

Fifth Third said commercial credit trends are expected to be fairly stable, with charge-offs in the second quarter and the rest of the year expected because of "isolated weakness in a modest number of credits within the aircraft leasing portfolio."

The bank said its loans and leases outstanding to commercial airline carriers totaled $122 million, and total commitment to those businesses was at $127 million as of March 31.

But the bank also said it expects good growth rates in deposits; middle-market lending to be strong; and its data-processing revenue to be up to 20 percent from last year's second quarter.