Fifth Third to Report Q2 Earnings: What's in Store for the Stock?

Fifth Third Bancorp FITB is scheduled to report second-quarter 2025 results on July 17, before the opening bell. Quarterly earnings and revenues are expected to have registered year-over-year growth in the to-be-reported quarter.

In the last reported quarter, the bank’s results benefited from a rise in net interest income (NII) and loan balances. A reduction in expenses was another positive. However, a decline in fee income and weak asset quality were headwinds.

This Cincinnati, OH-based lender has an impressive earnings surprise history. Its earnings beat estimates in the trailing four quarters, the surprise being 3.45%, on average.

Fifth Third Bancorp Price and EPS Surprise

Loans & NII: Per the Fed’s latest data, the overall loan demand was solid in the second quarter despite an uncertain macroeconomic backdrop. This is likely to have supported FITB's loan growth.

FITB expects second-quarter total average loans and leases to be 1% up from the first quarter’s reported figure. We estimate the metric to be $123 billion. This is likely to have supported the company’s average interest-earning assets.

The Zacks Consensus Estimate for average interest-earning assets of $194.7 billion for the second quarter indicates nearly 1% growth from the prior quarter’s actual. We project the metric to be the same as the consensus estimate.

In the second quarter, the Federal Reserve kept interest rates unchanged at 4.25–4.5%. This was due to uncertainty related to tariffs and their impact on the economy and inflation.  As such, FITB’s NII is likely to have experienced modest growth, as funding costs declined/stabilized.

The company expects adjusted NII to rise 2-3% compared to the first quarter of 2025. The Zacks Consensus Estimate for NII of $1.48 billion indicates 3% sequential rise. Our estimate for the metric is the same as the Zacks Consensus Estimate.

Non-Interest Revenues: Global mergers and acquisitions (M&As) activities in the second quarter of 2025 turned out impressive than earlier projections. Markets initially tumbled in early April following Trump’s announcement of new trade tariffs, which rattled business sentiment. However, as trade demand eases and policy direction becomes clear, deal-making activities picked up again in the last month of the quarter.

With decent M&A volumes, advisory revenues are expected to have improved, supporting FITB’s commercial banking revenues.

The Zacks Consensus Estimate for commercial banking revenues is anticipated to be $90.7 million, indicating a 13.3% sequential rise. We project the metric to be $87.4 million.

Mortgage rates in the second quarter were volatile but remained in the mid-to-upper 6% range. As such, refinancing activities and origination volumes witnessed decent growth. This is likely to have aided FITB’s mortgage banking income in the second quarter of 2025.

The Zacks Consensus Estimate for the mortgage banking income is expected to be $59.7 million, suggesting an increase of 4.7% from the prior quarter’s reported figure. We estimate the metric to be $54.5 million.

The Zacks Consensus Estimate for wealth and asset management revenues is pegged at $171.2 million, suggesting a marginal decline from the prior quarter’s actual. Our estimate is pinned at $167.5 million.

Management expects non-interest income to rise 2-6%  compared with the first-quarter reported level. The Zacks Consensus Estimate for non-interest income is pegged at $734.7 million, which indicates a 5.8% sequential rise. Our model estimates the metric to be $721.6 million.

Expenses: FITB expects adjusted non-interest expenses to decline 5% sequentially in the second quarter of 2025, due to its continued focus on disciplined expense management.Our estimate for total expenses is the same as the company guidance.

Asset Quality: As FITB had kept a substantial amount of money for potential delinquent loans in the prior quarters, we expect the company to maintain a modest reserve this time, given the expectations of higher interest rates for longer and the impacts of Trump’s tariffs on inflation.

The Zacks Consensus Estimate for non-performing assets is pegged at $920.7 million, indicating a 9.5% decline from the prior quarter's reported figure. Our model estimates the metric to be $800.3 million.

What the Zacks Model Reveals for FITB

Our proven model does not predict an earnings beat for Fifth Third this time. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. That is not the case here.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Fifth Third is -0.46%.

Zacks Rank: The company currently carries a Zacks Rank of 3.

The Zacks Consensus Estimate for earnings for the to-be-reported quarter has remained unchanged at 87 cents over the past seven days. This indicates a 1.2% rise from the prior-year quarter’s actual. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The consensus estimate for second-quarter revenues is pegged at $2.21 billion, suggesting a rise of 6.4% from the year-ago reported figure.

Stocks That Warrant a Look

Here are some bank stocks that you may want to consider, as our model shows that these have the right combination of elements to post earnings beats this time around.

The Earnings ESP for U.S. Bancorp USB is +0.21% and carries a Zacks Rank #3 at present. The company is slated to report second-quarter 2025 results on July 17. You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past seven days, the Zacks Consensus Estimate for U.S. Bancorp’s quarterly earnings has been unchanged at $1.07.

First Horizon FHN is also scheduled to announce quarterly numbers on July 16. The company has an Earnings ESP of +0.20% and carries a Zacks Rank #3 at present.

Quarterly earnings estimates for First Horizon have been unchanged at 41 cents over the past week. 

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This article originally published on Zacks Investment Research (zacks.com).

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