Fifth Third Q1 Earnings Top Estimates on Higher NII & Lower Expenses

Fifth Third Bancorp FITB has reported first-quarter 2025 adjusted earnings per share (EPS) of 73 cents, surpassing the Zacks Consensus Estimate of 70 cents. In the prior-year quarter, the company posted an EPS of 76 cents.Results benefited from a rise in net interest income (NII) and loan balances. A reduction in expenses was another positive. A decline in fee income 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 $478 million, down 0.4% year over year.FITB’s Quarterly Revenues Rise & Expenses FallTotal quarterly revenues in the reported quarter were $2.13 billion, which increased marginally year over year. However, the top line missed the Zacks Consensus Estimate by 0.3%.Fifth Third’s NII (on an FTE basis) was $1.44 billion, up 4% year over year. Our estimate for NII was pegged at $1.45 billion.The net interest margin (on an FTE basis) increased year over year to 3.03% from 2.86%. Our estimate for net interest margin was 2.94%.Non-interest income declined 2% year over year to $694 million. This fall was primarily led by a decrease in revenues from commercial banking and capital markets fees. Our estimate for non-interest income was pinned at $681.5 million.Non-interest expenses decreased 3% year over year to $1.3 billion. The fall was primarily due to a decline in marketing expenses and other non-interest expenses. Our estimate for the metric was $1.34 billion.Fifth Third’s Loan Rises, Deposits DeclineAs of March 31, 2025, average loans and leases were up 3% at $121.7 billion from the previous quarter. Average deposits declined 2% to $164.1 billion sequentially.FITB’s Credit Quality DeterioratesThe company has reported a provision for credit losses of $174 million, up 85% from the year-ago quarter. Our estimate for the metric was pinned at $184.4 million.Moreover, the total non-performing portfolio loans and leases were $996 million, up 34.1% year over year.Net charge-offs in the first quarter increased to $136 million or 0.46% of average loans and leases (on an annualized basis) from $110 million or 0.38% in the prior-year quarter. Our estimate for net charge-offs was $136.8 million. The total allowance for credit losses increased 2.1% to $2.52 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 11.73% compared with the 11.77% posted in the prior-year quarter. The CET1 capital ratio was 10.45%, down from 10.47% in the year-ago quarter. The leverage ratio was 9.19% compared with the year-earlier quarter’s 8.94%.FITB’s Capital Distribution ActivitiesIn the reported quarter, FITB repurchased $225 million of its common outstanding shares.Our Viewpoint on Fifth ThirdA rise in NII, driven by loan growth, deposit rate management, and fixed-rate asset repricing, supported top-line growth. Continued expense discipline led to a decline in expenses. Strategic acquisitions have diversified Fifth Third's revenue sources, which will aid its top-line growth in the future. However, weak asset quality is 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 #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other BanksCitizens Financial Group CFG posted first-quarter 2025 adjusted earnings per share of 77 cents, which surpassed the Zacks Consensus Estimate of 75 cents. The metric rose 18.4% from the year-ago quarter.  (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)CFG’s results benefited from a rise in non-interest income, along with reduced expenses. A strong capital position was another positive. However, lower net interest income and declining loan balances were major headwinds.Hancock Whitney Corp.’s HWC first-quarter 2025 earnings per share of $1.38 exceeded the Zacks Consensus Estimate and the year-ago figure of $1.28. HWC’s results benefited from an increase in non-interest income and net interest income. Lower provisions were other positives. However, higher adjusted expenses, and lower loan and deposit balances were headwinds.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>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 Citizens Financial Group, Inc. (CFG): 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