Loan Growth & High Fee Income to Support Fifth Third's Q4 Earnings

Fifth Third Bancorp FITB is scheduled to report fourth-quarter and full-year 2025 results on Jan. 20, 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 each of the trailing four quarters, with an average surprise of 4.52%.

Fifth Third Bancorp Price and EPS Surprise

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

Factors Likely to Impact FITB’s Q4 Performance

Loans & NII: Per the Federal Reserve’s latest data, overall loan demand remained resilient in the fourth quarter of 2025, which is likely to have supported FITB’s loan growth during the period.

FITB expects total average loans and leases to increase nearly 1% from the prior quarter’s reported level. This strength in lending activity is expected to have aided the company’s average interest-earning assets in the quarter.

The Zacks Consensus Estimate for average interest-earning assets of $194.9 billion for the fourth quarter indicates a nearly 1% rise from the prior quarter’s actual.

In the fourth quarter, the Fed lowered interest rates twice, bringing the benchmark rate down to the 3.50–3.75% range. Thus, stabilizing funding and deposit costs are expected to have supported the company’s NII growth.

The company expects fourth-quarter adjusted NII to be stable to up 1% on a sequential basis. The Zacks Consensus Estimate for NII is pegged at $1.54 billion, indicating a nearly 1% sequential increase.

Non-Interest Revenues: Global mergers and acquisitions (M&As) strengthened in the fourth quarter of 2025, rebounding from the lows witnessed in April and May following President Trump’s announcement of ‘Liberation Day’ tariff plans. As corporates adapted to the evolving geopolitical and macroeconomic environment, deal-making activity picked up. With improved M&A volumes, advisory revenues might have supported FITB’s commercial banking revenues during the quarter.

The Zacks Consensus Estimate for commercial banking revenues is anticipated to be $97.7 million, indicating a 12.3% sequential rise.

Although mortgage rates declined notably during the fourth quarter compared with levels seen at the beginning of 2025, 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 pegged at $55.1 million, indicating a 5.1% decrease from the prior quarter’s reported figure.

The Zacks Consensus Estimate for wealth and asset management revenues is pegged at $185.6 million, indicating a 6.2% increase from the prior quarter’s actual results.

Management expects fourth-quarter adjusted non-interest income to rise 2–3% from the third-quarter reported level. The Zacks Consensus Estimate for non-interest income is pegged at $800.8 million, which indicates a 2.5% sequential rise.

Expenses: The company’s expenses are expected to have increased in the fourth quarter of 2025, driven by continued investments in technology and initiatives aimed at enhancing customer experience. Higher compensation and benefits expenses, along with ongoing branch expansion and digitization efforts, are likely to have kept the company’s cost base elevated during the quarter.

Management expects adjusted non-interest expenses to increase 2% sequentially in the fourth quarter of 2025.

Asset Quality: As FITB sets aside a substantial amount for potential delinquent loans in prior quarters, the company is less likely to build higher reserves in the fourth quarter. This is supported by easing interest rates, which are expected to decline further despite the lingering inflationary impact of President Trump’s tariff policies.

Management expects the net charge-off (NCO) rate to be around 40 basis points, compared with 1.09% in the third quarter of 2025.

The Zacks Consensus Estimate for non-performing assets is pegged at $843.3 million, indicating a 4.7% rise from the prior quarter's reported figure.

What the Zacks Model Reveals for FITB

Our proven model predicts 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 +1.33%.

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 $1.01 per share over the past seven days. This indicates a 12.2% rise from the prior-year quarter’s actual.

The consensus estimate for fourth-quarter revenues is pegged at $2.33 billion, suggesting a rise of 7.3% from the year-ago reported figure.

FITB’s 2025 Outlook

The company expects full-year adjusted NII to increase 5.5%–6.5% year over year from the $5.66 billion reported in 2024. Average loans and leases are expected to increase by about 5% year over year.

Fifth Third expects non-interest income to grow 1%–2% year over year from the $2.97 billion reported in 2024.

For 2025, adjusted non-interest expenses are projected to increase 2%–2.5% year over year.

The net charge-off ratio is anticipated to be in the range of 43–47 basis points.

Other 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 KeyCorp KEY is +1.20% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is slated to report fourth-quarter 2025 results on Jan. 20, 2026. Over the past seven days, the Zacks Consensus Estimate for KEY's quarterly earnings has remained unchanged at 38 cents per share.

The PNC Financial Services Group, Inc. PNC is also scheduled to announce quarterly numbers on Jan. 16. The company has an Earnings ESP of +0.28% and carries a Zacks Rank #2 at present.

Over the past seven days, the Zacks Consensus Estimate for PNC’s quarterly earnings has been revised upward to $4.23 per share.

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

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