Fifth Third Q3 Earnings Top Estimates on Higher NII, Stock Gains

Fifth Third Bancorp FITB reported third-quarter 2025 adjusted earnings per share (EPS) of 93 cents, surpassing the Zacks Consensus Estimate of 87 cents. In the prior-year quarter, the company posted an EPS of 85 cents.

FITB shares rose 2.7% in the early-market trading on better-than-expected results. A full day’s trading session will depict a clearer picture.

Results have benefited from a rise in net interest income (NII), fee income and loan balances. However, higher expenses and weak asset quality were headwinds.

Results included a negative 2-cent impact of certain items. After considering this, the company has reported net income available to common shareholders (GAAP basis) of $608 million, up 14% year over year.

FITB’s Quarterly Revenues & Expenses Rise

Total quarterly revenues (FTE) in the reported quarter were $2.3 billion, which increased 8% year over year. Further, the top line surpassed the Zacks Consensus Estimate by 0.5%.

Fifth Third’s NII (on an FTE basis) was $1.52 billion, up 7% year over year. Our estimate for NII was pegged at $1.51 billion. This improvement was driven by the benefits from proactive deposit and wholesale funding management, decreasing interest-bearing liabilities costs, an improved earning asset mix and the benefit of fixed-rate asset repricing.

The net interest margin (on an FTE basis) increased year over year to 3.13% from 29%. Our estimate for net interest margin was 3.05%.

Non-interest income rose 10% year over year to $781 million. This rise was primarily due to an increase in revenues from wealth and asset management revenues, capital markets fees, and consumer banking revenues. Our estimate for non-interest income was pinned at $769 million.

Non-interest expenses increased 2% year over year to $1.27 billion. The increase was primarily due to a rise in all cost components, except for compensation and benefits, and other non-interest income. Our estimate for the metric was the same as reported.

The efficiency ratio was 54.9%, lower than the year-ago quarter’s 58.2%. A decline in the ratio indicates an improvement in profitability.

FITB Loans & Deposits Balance Increase Sequentially

As of Sept. 30, 2025, portfolio loans and leases rose slightly to $123.1 billion from the previous quarter. Total deposits inched up 1.4% from the previous quarter to $166.6 billion. Our estimates for portfolio loans and leases and deposits were $116.1 billion and $163.7 billion, respectively.

FITB’s Credit Quality Deteriorates

The company has reported a provision for credit losses of $197 million, up 23% from the year-ago quarter. Our estimate for the metric was pinned at $218 million.

Moreover, the total non-performing portfolio loans and leases were $801 million, up 10.5% year over year.

Net charge-offs in the third quarter increased to $339 million or 1.09% of average loans and leases (on an annualized basis) from $142 million or 0.48% in the prior-year quarter. Our estimate for net charge-offs was $144 million.

The total allowance for credit losses declined 1.1% to $2.42 billion year over year. Our estimate for allowance for credit losses was pinned at $2.63 billion.

Fifth Third’s Capital Position Mixed

The Tier 1 risk-based capital ratio was 11.60% compared with 12.07% posted in the prior-year quarter. The CET1 capital ratio was 10.54%, down from 10.75% in the year-ago quarter. The leverage ratio was 9.24% compared with the year-earlier quarter’s 9.11%.

FITB’s Recent Development

This month, FITB entered a definitive merger agreement to acquire Comerica Incorporated CMA. The impending acquisition serves as a strategic acceleration of Fifth Third’s long-term growth plan, enhancing scale, profitability and geographic reach.  

This transaction, expected to close at the end of the first quarter of 2026, will bring together two banking franchises to create the ninth-largest U.S. bank with nearly $288 billion in assets, $224 billion in deposits and $174 billion in loans.

Financially, the deal is projected to boost FITB’s earnings per share by 9% by 2027, while driving the combined efficiency ratio into the low-to-mid-50% range, roughly 200 basis points better than the current performance levels.

Our Viewpoint on Fifth Third

A rise in NII, driven by loan growth, deposit rate management, and fixed-rate asset repricing, supported top-line growth. The company’s ongoing investments in growth priorities continue to drive robust results. However, higher expenses and weak asset quality remain near-term concerns.

Fifth Third Bancorp Price, Consensus and EPS Surprise

Fifth Third Bancorp price-consensus-eps-surprise-chart | Fifth Third Bancorp Quote

Currently, Fifth Third carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Bank

Hancock Whitney Corp.’s HWC third-quarter 2025 earnings per share of $1.49 exceeded the Zacks Consensus Estimate of $1.41. Further, the bottom line rose 12% from the prior year quarter.

HWC’s results benefited from an increase in non-interest income and net interest income alongside lower provisions. Also, higher loans were another positive. However, higher adjusted expenses and lower deposit balances were headwinds. 

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

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