Fifth Third Bancorp FITB has reported fourth-quarter 2024 adjusted earnings per share (EPS) of 90 cents, surpassing the Zacks Consensus Estimate of 87 cents. In the prior-year quarter, the company reported an EPS of 99 cents.

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For 2024, adjusted EPS was $3.46, which beat the Zacks Consensus Estimate of $3.33. This compares unfavorably with $3.61 reported in the year-ago quarter.

Results benefited from a rise in net interest income (NII) and loan balances. The strong capital position was another positive. A decline in fee income and weak asset quality were headwinds. 

The company has reported net income available to common shareholders (GAAP basis) of $582 million, up 18.3% year over year.

For 2024, the company reported net income available to common shareholders (GAAP basis) of $2.16 billion, which decreased 2.6% year over year.

FITB’s Quarterly Revenues Rise & Expenses Fall

Total quarterly revenues in the reported quarter were $2.17 billion, which increased marginally year over year. However, the top line missed the Zacks Consensus Estimate of $2.21 billion.

Full-year revenues were $8.5 billion, which decreased 2.6% year over year. The top line missed the Zacks Consensus Estimate of $8.52 billion. 

Fifth Third’s NII (on an FTE basis) was $1.44 billion, up 1.4% year over year. Our estimate for NII matched the reported figure.

The net interest margin (on an FTE basis) increased year over year to 2.97% from 2.85%. Our estimate for net interest margin was pinned at 2.91%.

Non-interest income declined 1.6% year over year to $732 million. This fall was primarily led by a decrease in revenues from mortgage banking, along with incurring another noninterest loss of $4 million. Our estimate for non-interest income was pinned at $771 million.

Non-interest expenses decreased 15.7% year over year to $1.23 billion. The fall was primarily due to a decline in marketing expense and other non-interest expense. Our estimate for the metric was pinned at $1.32 billion.

Adjusted non-interest expenses were $1.22 billion, up marginally year over year.  The rise was due to an increase in compensation and benefits expense as well as technology and communications expense, partially offset by a decrease in marketing expense.

FITB’s Loan Rises, Deposits Stable

As of Dec. 31, 2024, average loans and leases were up nearly 1% at $118.5 billion from the previous quarter. Average deposits remained stable at $167.2 billion sequentially.

FITB’s Credit Quality Deteriorates

The company reported a provision for credit losses of $179 million, up significantly from $55 million reported in the year-ago quarter. Our estimate for the metric was pinned at $156.7 million.

Moreover, the total non-performing portfolio loans and leases were $853 million, up 24% year over year. 

Net charge-offs in the fourth quarter increased to $136 million or 0.46% of average loans and leases (on an annualized basis) compared with the $96 million or 0.32% witnessed in the prior-year quarter. Our estimate for net charge-offs was pinned at $135.6 million. 

However, the total allowance for credit losses decreased marginally to $2.49 billion year over year. Our estimate for allowance for credit losses was pinned at $2.33 billion.

FITB’s Capital Position Strong

The Tier 1 risk-based capital ratio was 11.8% compared with the 11.59% posted at the end of the prior-year quarter. The CET1 capital ratio was 10.51%, up from the 10.29% recorded at the end of the year-ago quarter. Also, the leverage ratio was 9.22% compared with the year-earlier quarter’s 8.73%.

FITB’s Capital Distribution Activities

In the reported quarter, FITB repurchased $300 million of its common outstanding shares.

Our Viewpoint on FITB

Strategic acquisitions diversified Fifth Third's revenue sources, supporting its top-line growth. Rising Loan and decent deposit balance reflect balance sheet strength. However, weak asset quality remains 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 #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

M&T Bank Corporation’s MTB fourth-quarter 2024 adjusted net operating earnings per share of $3.92 beat the Zacks Consensus Estimate of $3.70. The bottom line compared favorably with earnings of $2.81 per share in the year-ago quarter.

MTB’s results have benefited from a rise in loans and leases and non-interest income. A decline in expenses and provision for credit losses were other positives. However, a fall in deposit balance was a headwind.

Truist Financial’s TFC fourth-quarter 2024 adjusted earnings of 91 cents per share surpassed the Zacks Consensus Estimate of 87 cents. The figure also jumped 12.3% year over year.

TFC’s results benefited from higher NII and non-interest income. Further, lower provisions and higher average deposit balances acted as tailwinds. On the other hand, lower average loan balances and higher adjusted non-interest expenses were undermining factors.

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