Fifth Third Q1 Earnings Top Estimates on Higher NII & Lower Expenses

Fifth Third Bancorp FITB has reported first-quarter 2025 adjusted earnings per share (EPS) of 73 cents, surpassing the Zacks Consensus Estimate of 70 cents. In the prior-year quarter, the company posted an EPS of 76 cents.

Results benefited from a rise in net interest income (NII) and loan balances. A reduction in expenses was another positive. A decline in fee income 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 $478 million, down 0.4% year over year.

FITB’s Quarterly Revenues Rise & Expenses Fall

Total quarterly revenues in the reported quarter were $2.13 billion, which increased marginally year over year. However, the top line missed the Zacks Consensus Estimate by 0.3%.

Fifth Third’s NII (on an FTE basis) was $1.44 billion, up 4% year over year. Our estimate for NII was pegged at $1.45 billion.

The net interest margin (on an FTE basis) increased year over year to 3.03% from 2.86%. Our estimate for net interest margin was 2.94%.

Non-interest income declined 2% year over year to $694 million. This fall was primarily led by a decrease in revenues from commercial banking and capital markets fees. Our estimate for non-interest income was pinned at $681.5 million.

Non-interest expenses decreased 3% year over year to $1.3 billion. The fall was primarily due to a decline in marketing expenses and other non-interest expenses. Our estimate for the metric was $1.34 billion.

Fifth Third’s Loan Rises, Deposits Decline

As of March 31, 2025, average loans and leases were up 3% at $121.7 billion from the previous quarter. Average deposits declined 2% to $164.1 billion sequentially.

FITB’s Credit Quality Deteriorates

The company has reported a provision for credit losses of $174 million, up 85% from the year-ago quarter. Our estimate for the metric was pinned at $184.4 million.

Moreover, the total non-performing portfolio loans and leases were $996 million, up 34.1% year over year.

Net charge-offs in the first quarter increased to $136 million or 0.46% of average loans and leases (on an annualized basis) from $110 million or 0.38% in the prior-year quarter. Our estimate for net charge-offs was $136.8 million. 

The total allowance for credit losses increased 2.1% to $2.52 billion year over year. Our estimate for allowance for credit losses was pinned at $2.53 billion.

Fifth Third’s Capital Position Mixed

The Tier 1 risk-based capital ratio was 11.73% compared with the 11.77% posted in the prior-year quarter. The CET1 capital ratio was 10.45%, down from 10.47% in the year-ago quarter. The leverage ratio was 9.19% compared with the year-earlier quarter’s 8.94%.

FITB’s Capital Distribution Activities

In the reported quarter, FITB repurchased $225 million of its common outstanding shares.

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. Continued expense discipline led to a decline in expenses. Strategic acquisitions have diversified Fifth Third's revenue sources, which will aid its top-line growth in the future. However, weak asset quality is a near-term concern.

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 #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

Citizens Financial Group CFG posted first-quarter 2025 adjusted earnings per share of 77 cents, which surpassed the Zacks Consensus Estimate of 75 cents. The metric rose 18.4% from the year-ago quarter.  (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

CFG’s results benefited from a rise in non-interest income, along with reduced expenses. A strong capital position was another positive. However, lower net interest income and declining loan balances were major headwinds.

Hancock Whitney Corp.’s HWC first-quarter 2025 earnings per share of $1.38 exceeded the Zacks Consensus Estimate and the year-ago figure of $1.28.
 
HWC’s results benefited from an increase in non-interest income and net interest income. Lower provisions were other positives. However, higher adjusted expenses, and lower loan and deposit balances were headwinds.

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