Fifth Third Q2 Earnings Top Estimates on Higher NII & Fee Income

Fifth Third Bancorp FITB reported second-quarter 2025 adjusted earnings per share (EPS) of 9 cents, surpassing the Zacks Consensus Estimate of 87 cents. In the prior-year quarter, the company posted an EPS of 86 cents.Results 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 $591 million, down 5.3% year over year.FITB’s Quarterly Revenues & Expenses RiseTotal quarterly revenues in the reported quarter were $2.25 billion, which increased 7.7% year over year. Further, the top line surpassed the Zacks Consensus Estimate by 1.8%.Fifth Third’s NII (on an FTE basis) was $1.5 billion, up 7.6% year over year. Our estimate for NII was pegged at $1.48 billion.The net interest margin (on an FTE basis) increased year over year to 3.12% from 2.88%. Our estimate for net interest margin was 3.05%.Non-interest income rose 7.9% year over year to $750 million. This rise was primarily due to an increase in revenues from wealth and asset management and consumer banking fees. Our estimate for non-interest income was pinned at $721.6 million.Non-interest expenses increased 3.5% year over year to $1.26 billion. The increase was primarily due to a rise in all cost components except occupancy and other non-interest income. Our estimate for the metric was $1.27 billion.FITB’s Credit Quality DeterioratesThe company has reported a provision for credit losses of $173 million, up 78% from the year-ago quarter. Our estimate for the metric was pinned at $149.1 million.Moreover, the total non-performing portfolio loans and leases were $886 million, up 37.8% year over year.Net charge-offs in the first quarter increased to $139 million or 0.45% of average loans and leases (on an annualized basis) from $144 million or 0.49% in the prior-year quarter. Our estimate for net charge-offs was $145.3 million.The total allowance for credit losses increased 5.5% to $2.56 billion year over year. Our estimate for allowance for credit losses was pinned at $2.53 billion.Fifth Third’s Capital Position MixedThe Tier 1 risk-based capital ratio was 11.83% compared with 11.93% posted in the prior-year quarter. The CET1 capital ratio was 10.56%, down from 10.62% in the year-ago quarter. The leverage ratio was 9.42% compared with the year-earlier quarter’s 9.07%.Our Viewpoint on Fifth ThirdA rise in NII, driven by loan growth, deposit rate management, and fixed-rate asset repricing, supported top-line growth. Strategic acquisitions have diversified Fifth Third's revenue sources, which will aid its top-line growth in the future. 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 QuoteCurrently, Fifth Third carries a Zacks Rank #3 (Hold). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other BanksState Street’s STT second-quarter 2025 adjusted earnings of $2.53 per share surpassed the Zacks Consensus Estimate of $2.36. The bottom line also increased 17.7% from the prior-year quarter. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)Results were aided by growth in fee revenues. Also, STT witnessed improvements in total assets under custody and administration and assets under management balances. However, higher adjusted expenses, a jump in provisions and lower NII acted as spoilsports.Hancock Whitney Corp.’s HWC second-quarter 2025 adjusted earnings per share of $1.37 exceeded the Zacks Consensus Estimate of $1.34. Further, the bottom line rose 4.6% from the prior year quarter.HWC's results benefited from an increase in non-interest income and NII. Also, higher loans were another positive. However, higher adjusted expenses and provisions alongside lower deposit balances were headwinds.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fifth Third Bancorp (FITB): Free Stock Analysis Report State Street Corporation (STT): Free Stock Analysis Report Hancock Whitney Corporation (HWC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks