Fifth Third Bancorp FITB is scheduled to report first-quarter 2025 results on April 17 before the opening bell. Quarterly revenues are expected to have registered growth in the to-be-reported quarter, while earnings are likely to have declined on a year-over-year basis.

In the last reported quarter, the bank’s earnings surpassed the Zacks Consensus Estimate. Results benefited from a rise in net interest income (NII) and loan balance. A decline in fee income and higher expenses were spoilsports.

This Cincinnati, OH-based lender has an impressive earnings surprise history. Its earnings beat estimates in the trailing four quarters, the surprise being 4.13%, on average.

Fifth Third Bancorp Price and EPS Surprise

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

Here are some factors that are expected to have impacted Fifth Third’s first-quarter performance.

Loans & NII: In the first quarter, the Federal Reserve kept interest rates unchanged at 4.25-4.5%. As such, FITB’s NII is likely to have seen some improvement, given relatively lower funding costs.

The company expects adjusted NII to be in line with the $1.44 billion reported in the fourth quarter of 2024. The Zacks Consensus Estimate for NII of $1.44 billion indicates a marginal sequential rise. Our estimate is the same as the Zacks Consensus Estimate.

In the first quarter, the lending scenario was not very impressive as Trump’s tariff plan resulted in uncertainty across the markets. Per the Fed’s latest data, the demand for overall loans was modest in the quarter. 

FITB expects first-quarter total average loans and leases to be 2% up from the fourth quarter’s reported figure. We estimate the metric to be $120.9 billion. This is expected to have supported the company’s average interest-earning assets in the first quarter of 2025.

The Zacks Consensus Estimate for average interest-earning assets of $195.6 billion for the quarter indicates 1.1% growth from the prior quarter’s actual. Our estimate suggests the metric to be $197.4 billion.

Non-Interest Revenues: Global merger and acquisition (M&A) activities in the first quarter of 2025 witnessed modest growth, driven mainly by the Asia Pacific region. The initial optimism of a robust IB performance on the back of the Trump administration being business-friendly and the likelihood of tax cuts and deregulations quickly faded amid trade tensions and tariff uncertainties. This led to significant market volatility and economic uncertainty. 

As such, companies became more cautious about pursuing M&A despite stabilizing rates and ample capital. With decreased M&A volumes, advisory revenues are expected to have declined, negatively impacting commercial banking revenues.

The Zacks Consensus Estimate for commercial banking revenues is pegged at $103.9 million, indicating a 4.7% sequential fall. We project the metric to be $93.5 million.

Mortgage rates in the first quarter remained range-bound and hovered near the 7% mark. As such, refinancing activities and origination volumes have not witnessed significant growth. This is likely to have negatively impacted FITB’s mortgage banking income. 

The Zacks Consensus Estimate for the mortgage banking income is pegged at $51.3 million, suggesting a decrease of 10% from the prior quarter’s reported figure. We estimate the metric to be $50.5 million.

The Zacks Consensus Estimate for wealth and asset management revenues is pegged at $160.3 million, suggesting a decline of 1.7% from the prior quarter’s actual. Our estimate is pinned at $155 million.

Management expects non-interest income to decline 7-8% in the quarter to be reported compared with the fourth-quarter reported level. The Zacks Consensus Estimate for non-interest income is pegged at $708.9 million, which indicates a 3.2% drop from the prior quarter’s actual. Our model estimates the metric to be $681.5 million.

Expenses: The company’s expense base is anticipated to have escalated due to investments aimed at operational efficiencies in technology and marketing and initiatives, such as branch digitization and marketing expenses. 

On a sequential basis, management expects adjusted non-interest expenses to rise 8% from the $1.2 billion reported in the fourth quarter. We estimate total expenses to rise 9.1% on a sequential basis to $1.4 billion.

Asset Quality: Fifth Third is likely to have set aside a substantial amount of money for potential bad loans, given the expectations of higher for longer interest rate backdrop and tariff-related uncertainty.

The Zacks Consensus Estimate for non-performing assets is pegged at $870.1 million, indicating a 1.2% rise from the prior quarter's reported figure. Our model estimates the metric to be $735.8 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 -0.60%.

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

The Zacks Consensus Estimate for FITB’s first-quarter earnings of 70 cents per share has been unchanged in the past seven days. The figure indicates a fall of 7.9% from the year-ago reported number. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

The consensus estimate for revenues is pegged at $2.14 billion, suggesting a rise of 1.8% 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 U.S. Bancorp USB is +0.94% and it carries a Zacks Rank #3 at present. The company is slated to report first-quarter 2025 results on April 16.

Over the past seven days, the Zacks Consensus Estimate for U.S. Bancorp’s quarterly earnings has been unchanged at 99 cents.

First Horizon FHN is also scheduled to announce quarterly numbers on April 16. The company carries a Zacks Rank #3 at present and has an Earnings ESP of +3.80%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Quarterly earnings estimates for First Horizon have been unchanged at 40 cents over the past week.

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Fifth Third Bancorp (FITB) : Free Stock Analysis Report

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

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