Fifth Third Q4 Earnings Beat Estimates on Higher NII & Lower Expenses

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.Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.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 FallTotal 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 StableAs 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 DeterioratesThe 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 StrongThe 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 ActivitiesIn the reported quarter, FITB repurchased $300 million of its common outstanding shares.Our Viewpoint on FITBStrategic 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 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 BanksM&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.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them 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 M&T Bank Corporation (MTB): Free Stock Analysis Report Truist Financial Corporation (TFC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks