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

Core Viewpoint - Fifth Third Bancorp (FITB) reported fourth-quarter 2024 adjusted earnings per share (EPS) of 90 cents, exceeding the Zacks Consensus Estimate of 87 cents, but down from 99 cents in the prior-year quarter [1][2] Financial Performance - For 2024, adjusted EPS was $3.46, beating the Zacks Consensus Estimate of $3.33, but lower than $3.61 reported in the previous year [2] - Net income available to common shareholders (GAAP basis) for the fourth quarter was $582 million, an increase of 18.3% year over year, while full-year net income was $2.16 billion, a decrease of 2.6% year over year [3] - Total quarterly revenues were $2.17 billion, a slight year-over-year increase, but missed the Zacks Consensus Estimate of $2.21 billion; full-year revenues were $8.5 billion, down 2.6% year over year [4] Income and Expenses - Net interest income (NII) for the fourth quarter was $1.44 billion, up 1.4% year over year, matching estimates; the net interest margin increased to 2.97% from 2.85% [4][5] - Non-interest income declined 1.6% year over year to $732 million, primarily due to decreased revenues from mortgage banking [5] - Non-interest expenses decreased 15.7% year over year to $1.23 billion, attributed to lower marketing and other non-interest expenses [6] Loan and Deposit Trends - Average loans and leases increased nearly 1% to $118.5 billion, while average deposits remained stable at $167.2 billion as of December 31, 2024 [7] Credit Quality - The provision for credit losses was $179 million, significantly up from $55 million in the prior-year quarter; total non-performing loans and leases increased 24% year over year to $853 million [8] - Net charge-offs rose to $136 million or 0.46% of average loans and leases, compared to $96 million or 0.32% in the previous year [9] Capital Position - The Tier 1 risk-based capital ratio was 11.8%, up from 11.59% year over year; the CET1 capital ratio increased to 10.51% from 10.29% [10] - The leverage ratio improved to 9.22% compared to 8.73% in the prior-year quarter [10] Capital Distribution - In the reported quarter, the company repurchased $300 million of its common outstanding shares [11] Strategic Outlook - Strategic acquisitions have diversified revenue sources, supporting top-line growth; however, weak asset quality remains a concern [12]