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

Core Viewpoint - Fifth Third Bancorp reported first-quarter 2025 adjusted earnings per share (EPS) of 73 cents, exceeding the Zacks Consensus Estimate of 70 cents, but down from 76 cents in the prior-year quarter [1][2] Financial Performance - Total quarterly revenues were $2.13 billion, a slight year-over-year increase, but missed the Zacks Consensus Estimate by 0.3% [3] - Net interest income (NII) was $1.44 billion, up 4% year over year, while the net interest margin increased to 3.03% from 2.86% [3] - Non-interest income declined 2% year over year to $694 million, primarily due to decreased revenues from commercial banking and capital markets fees [4] - Non-interest expenses decreased 3% year over year to $1.3 billion, attributed to lower marketing and other non-interest expenses [4] Loan and Deposit Trends - Average loans and leases rose 3% to $121.7 billion, while average deposits declined 2% to $164.1 billion [5] Credit Quality - Provision for credit losses was $174 million, up 85% from the year-ago quarter, with total non-performing portfolio loans and leases increasing 34.1% year over year to $996 million [6] - Net charge-offs increased to $136 million, or 0.46% of average loans and leases, compared to 0.38% in the prior-year quarter [7] - Total allowance for credit losses rose 2.1% to $2.52 billion year over year [7] Capital Position - Tier 1 risk-based capital ratio was 11.73%, slightly down from 11.77% in the prior-year quarter, while the CET1 capital ratio decreased to 10.45% from 10.47% [8] - The leverage ratio improved to 9.19% from 8.94% year over year [8] Capital Distribution - The company repurchased $225 million of its common outstanding shares during the reported quarter [9] Strategic Outlook - The rise in NII, driven by loan growth and expense discipline, supports top-line growth, while weak asset quality remains a near-term concern [10]