NII & Fee Income to Aid Fifth Third's Q3 Earnings, High Costs to Hurt

Fifth Third Bancorp FITB is scheduled to report third-quarter 2025 results on Oct. 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), fee income and loan balances. However, a rise in expenses 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 3.71%, on average.

Fifth Third Bancorp's Price and EPS Surprise

Factors Likely to Impact FITB’s Q3 Performance

Loans & NII: Per the Fed’s latest data, overall loan demand remained strong in the third quarter of 2025. This is likely to have aided FITB’s loan growth.

FITB expects third-quarter total average loans and leases to remain stable or grow nearly 1% up from the second quarter’s reported figure. We estimate the metric to be $124.9 billion. This is likely to have supported the company’s average interest-earning assets.

The Zacks Consensus Estimate for average interest-earning assets of $193.6 billion for the third quarter indicates marginal growth from the prior quarter’s actual. We project the metric to be $194.6.

In September, the Federal Reserve reduced interest rates by 25 basis points to a range of 4.00–4.25%. With rates remaining largely stable throughout most of the quarter, funding and deposit costs likely stabilized, supporting modest growth in the company’s NII.

The company expects third-quarter adjusted NII to rise 1% on a sequential basis. The Zacks Consensus Estimate for NII of $1.52 billion indicates a 1.9% sequential rise. Our estimate suggests the metric to be $1.51 billion.

Non-Interest Revenues: Global mergers and acquisitions (M&As) rebounded impressively in the third quarter of 2025 from the lows witnessed in April and May following President Trump’s announcement of ‘Liberation Day’ tariff plans. As corporates adapted to the rapidly evolving geopolitical and macroeconomic scenarios, larger M&A deals kicked in.

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 $91.5 million, indicating a 15.8% sequential rise. We project the metric to be $99.3 million.

Though mortgage rates declined notably during the third quarter, they remained relatively range bound. As a result, refinancing and origination activities did not witness meaningful growth. Consequently, FITB’s mortgage banking income is expected to have been impacted negatively.

The Zacks Consensus Estimate for mortgage banking income is expected to be $53.4 million, indicating a 4.7% decrease from the prior quarter’s reported figure. We estimate the metric to be $43.3 million.

The Zacks Consensus Estimate for wealth and asset management revenues is pegged at $174.7 million, indicating a 5.2% increase from the prior quarter’s actual results. Our estimate is pinned at $179.1 million.

Management expects third-quarter non-interest income to rise 5-7% compared with the second-quarter reported level. The Zacks Consensus Estimate for non-interest income is pegged at $769.4 million, which indicates a 2.6% sequential rise. Our model estimates the metric is the same as the Zacks estimate.

Expenses: The company’s expenses are expected to have remained elevated in the third quarter of 2025, driven by continued investments in technology and initiatives to enhance customer experience. Higher compensation and benefits expenses, along with branch expansion, are likely to have kept overall costs high during the period.

FITB expects adjusted non-interest expenses to increase 1% sequentially in the third quarter of 2025. We estimate non-interest expenses to rise slightly on a sequential basis to $1.3 billion.

Asset Quality: As FITB had kept a substantial amount of money for potential delinquent loans in prior quarters, we expect the company to maintain a modest reserve this time, given the expectations of two more interest rate cuts amid the persistent impact of Trump’s tariffs on inflation.

The Zacks Consensus Estimate for non-performing assets is pegged at $892.6 million, indicating a 2.2% decline from the prior quarter's reported figure. Our model estimates the metric to be $865 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 the case here, as you can see below.

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 0.00%.

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

The Zacks Consensus Estimate for earnings for the to-be-reported quarter has been revised downward to 87 cents over the past seven days. This indicates a 2.4% rise from the prior-year quarter’s actual.

The consensus estimate for third-quarter revenues is pegged at $2.29 billion, suggesting a rise of 7.4% 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 beat this time around.

The Earnings ESP for State Street Corporation STT is +0.45% and carries a Zacks Rank #1 at present. The company is slated to report third-quarter 2025 results on Oct. 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 STT’s quarterly earnings has been revised upward to $1.11.

First Horizon Corporation FHN is also scheduled to announce quarterly numbers on Oct. 15. The company has an Earnings ESP of +1.20% and carries a Zacks Rank #2 at present.

Quarterly earnings estimates for FHN have been unchanged at 45 cents over the past week.

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

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