Fifth Third's Q4 Earnings Top Estimates on Higher NII, Lower Provisions

Fifth Third Bancorp FITB reported fourth-quarter 2025 adjusted earnings per share (EPS) of $1.08, surpassing the Zacks Consensus Estimate of $1.01. In the prior-year quarter, the company posted EPS of 90 cents.Results have benefited from a rise in net interest income (NII), fee income and deposit balances. A decline in provision was another tailwind. However, higher expenses were a headwind.Results excluded a negative 4-cent impact of certain items. After considering this, the company reported net income available to common shareholders (GAAP basis) of $699 million, up 20% year over year.For 2025, earnings per share were $3.53, up from $3.14 in 2024. The metric matched the Zacks Consensus Estimate. Net income available to common shareholders was $2.38 billion, up 10% year over year.FITB’s Quarterly Revenues & Expenses RiseTotal quarterly revenues (FTE) in the reported quarter were $2.34 billion, which increased 8% year over year. Further, the top line surpassed the Zacks Consensus Estimate of $2.32 billion.For 2025, total revenues (FTE) were $9.04 billion, which increased 6% year over year. Further, the top line surpassed the Zacks Consensus Estimate of $9.01 billion.Fifth Third’s NII (on an FTE basis) for the fourth quarter was $1.53 billion, up 6% year over year. This improvement was driven by the benefits from proactive deposit and wholesale funding management and decreasing interest-bearing liabilities costs.The net interest margin (NIM) (on an FTE basis) increased to 3.13% from 2.97% in the year-ago quarter. Non-interest income rose 11% year over year to $811 million. This rise was primarily due to an increase in revenues from wealth and asset management revenues, commercial payment revenues and consumer banking revenues. Non-interest expenses jumped 7% year over year to $1.31 billion. The increase was primarily due to a rise in all cost components.The efficiency ratio was 55.8%, lower than the year-ago quarter’s 56.4%. A decline in the ratio indicates an improvement in profitability.FITB’s Loans Decline, Deposits Increase SequentiallyAs of Dec. 31, 2025, portfolio loans and leases fell slightly to $122.6 billion from the previous quarter. Total deposits inched up 3% from the prior quarter to $171.8 billion.FITB’s Credit Quality ImprovesThe company reported a provision for credit losses of $119 million, down 34% from the year-ago quarter. Moreover, the total non-performing portfolio loans and leases were $797 million, down 6.6% year over year.Net charge-offs in the fourth quarter declined to $125 million or 0.40% of average loans and leases (on an annualized basis) from $136 million or 0.46% in the prior-year quarter. The total allowance for credit losses declined 3.1% to $2.41 billion year over year.Fifth Third’s Capital Position MixedThe Tier 1 risk-based capital ratio was 11.82% compared with 11.86% posted in the prior-year quarter. The CET1 capital ratio was 10.77%, up from 10.57% in the year-ago quarter. The leverage ratio was 9.42% compared with the year-earlier quarter’s 9.22%.Our Viewpoint on Fifth ThirdA rise in NII, driven by loan growth, deposit rate management and fixed-rate asset repricing, supported top-line growth. The company’s ongoing investments in growth priorities continue to drive robust results. With shareholder and regulatory approvals secured, FITB expects the merger with Comerica to close on Feb. 1, 2026. The impending acquisition serves as a strategic acceleration of Fifth Third’s long-term growth plan, enhancing scale, profitability and geographic reach. However, higher expenses remain a near-term concern.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 see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Performance of Other BanksBOK Financial Corporation's BOKF fourth-quarter 2025 adjusted net income per share of $2.48 surpassed the Zacks Consensus Estimate of $2.13. The bottom line increased 16.9% from the prior-year quarter.BOKF’s results benefited from higher NII and total fees and commissions. An increase in loans and deposit balances was another positive. However, the increase in operating expenses was a major undermining factor.First Horizon Corporation’s FHN fourth-quarter 2025 adjusted earnings per share of 52 cents surpassed the Zacks Consensus Estimate of 47 cents. This compares favorably with 43 cents in the year-ago quarter.FHN’s results benefited from higher NII and a significant rise in non-interest income, along with the absence of provision for credit losses. However, the rise in expenses remains a headwind.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 BOK Financial Corporation (BOKF): Free Stock Analysis Report First Horizon Corporation (FHN): 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