Fifth Third Q3 Earnings Beat on High Loan Demand, NII Declines Y/Y

Core Viewpoint - Fifth Third Bancorp (FITB) reported third-quarter 2024 adjusted earnings per share (EPS) of 85 cents, exceeding the Zacks Consensus Estimate of 82 cents, but down from 92 cents in the prior-year quarter [1] - The results were supported by an increase in loan balances and strong capital ratios, although net interest income (NII), fee income, and higher expenses negatively impacted performance [1] Financial Performance - Total revenues for the quarter were $2.14 billion, a decrease of 1$2.16 billion [2] - NII (on a fully taxable equivalent basis) was $1.43 billion, down 1.2$711 million, primarily due to reduced revenues from mortgage banking and leasing [2] Expense Analysis - Non-interest expenses rose by 4.7% year over year to $1.24 billion, driven by increases in compensation, technology, and other non-interest expenses [3] Loan and Deposit Trends - As of September 30, 2024, average loans and leases increased marginally to$117.4 billion, while average deposits remained stable at $167.2 billion [4] Credit Quality Assessment - The provision for credit losses was$160 million, up 34.5% year over year, with total non-performing loans and leases increasing to $725 million, an 18.5$142 million, or 0.48% of average loans and leases, compared to 0.41% in the prior-year quarter [5] - The total allowance for credit losses decreased by 3.2% to $2.44 billion year over year [5] Capital Position - The Tier 1 risk-based capital ratio improved to 12.07$200 million of its common shares and increased its quarterly cash dividend by 6% to 37 cents per share [7] Market Outlook - The company's strong capital position is expected to support future capital distribution activities, while the recent dividend increase may enhance investor confidence [8] - However, lower NII and fee income may pressure top-line growth moving forward [8]