Fifth Third Bancorp (NasdaqGS:FITB) Q4 2025 Earnings call January 20, 2026 10:00 AM ET Company ParticipantsMatt Curoe - Senior Director of Investor RelationsTim Spence - Chairman, CEO, and PresidentBryan Preston - CFOConference Call ParticipantsKen Usdin - Former AnalystEbrahim Poonawala - AnalystErika Najarian - AnalystMike Mayo - AnalystGerard Cassidy - AnalystManan Gosalia - AnalystScott Siefers - AnalystJohn Pancari - AnalystChristopher McGratty - AnalystOperatorThank you for standing by, and welcome to ...

Fifth Third Bancorp (NasdaqGS:FITB) Q4 2025 Earnings call January 20, 2026 10:00 AM ET Company ParticipantsMatt Curoe - Senior Director of Investor RelationsTim Spence - Chairman, CEO, and PresidentBryan Preston - CFOConference Call ParticipantsKen Usdin - Former AnalystEbrahim Poonawala - AnalystErika Najarian - AnalystMike Mayo - AnalystGerard Cassidy - AnalystManan Gosalia - AnalystScott Siefers - AnalystJohn Pancari - AnalystChristopher McGratty - AnalystOperatorThank you for standing by, and welcome to ...

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.04, or $1.08 excluding certain items, with an adjusted return on equity of 14.5% and an adjusted return on assets of 1.41% [3][4] - Adjusted fourth quarter revenues rose 5% year over year, driven by a 6% increase in net interest income and a 13% increase in wealth and asset management fees [4][15] - The CET1 ratio increased to 10.8%, and tangible book value per share grew 21% year over year [4][25] Business Line Data and Key Metrics Changes - Average loans increased by 5% year over year, with consumer loans and middle market C&I loans both growing by 7% [4][15] - Wealth and asset management fees increased by 13%, with assets under management reaching $80 billion [9][20] - Commercial payments fees grew by 8% year over year, driven by core treasury management activity [20] Market Data and Key Metrics Changes - In the Southeast, the company opened 50 new branches, contributing to a 2.5% growth in net new consumer households year over year [5][19] - The Southeast consumer deposits increased by 4% sequentially, accounting for over 50% of total consumer deposit growth for the quarter [19][20] - The company achieved the number two origination market share in HELOC within its footprint, up from number four in the prior year [17] Company Strategy and Development Direction - The company is focused on stability, profitability, and growth, with a disciplined approach to operations and long-term investments [3] - The merger with Comerica is expected to close on February 1, 2026, with anticipated expense synergies of $850 million and revenue synergies of over $500 million over the next five years [10][11] - The company aims to accelerate retail deposit growth and improve the combined company's funding profile through targeted marketing [27][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate uncertain environments and deliver strong shareholder returns [3][26] - The outlook for 2026 includes expectations for full-year net interest income to range between $8.6 billion and $8.8 billion, with a focus on improving the balance sheet [27][29] - Management noted that while 2025 was eventful, the company is pleased with its disciplined operating performance and ability to meet financial commitments [26] Other Important Information - The company shipped over 400 updates to its consumer mobile app in 2025, which was recognized as the top mobile banking app for user satisfaction among regional banks [5][6] - The net charge-off ratio was 40 basis points for the quarter, the lowest level in the past seven quarters, indicating improved asset quality [4][23] Q&A Session Summary Question: What are the biggest opportunities with Comerica? - Management highlighted immediate opportunities in leveraging Comerica's existing customer base and expanding into Texas markets, with a focus on innovation banking as a long-term opportunity [33][34] Question: How is the integration of Comerica progressing? - The integration is ahead of schedule, with the conversion date moved up to Labor Day from mid-October, allowing for earlier realization of revenue and expense synergies [41][43] Question: What is the outlook for C&I loan growth? - Management noted that while utilization dipped during the government shutdown, there has been a rebound, and C&I loan balances have increased since January 1 [45][46]

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.91, or $0.93 excluding certain items, with adjusted revenues rising 6% year over year to $2.3 billion, the highest since 2022 [4][12] - Net interest income (NII) grew 7% year over year and 2% sequentially, with net interest margin expanding for the seventh consecutive quarter [12][14] - Adjusted return on assets (ROA) was 1.25%, return on tangible common equity (ROTCE) was 17.7%, and efficiency ratio was 54.1% [5][12] - Tangible book value per share increased 7% year over year and 3% sequentially [5][12] Business Line Data and Key Metrics Changes - Average loans increased 6% year over year, with commercial non-performing assets declining 14% [5][20] - Wealth management fees rose 11% year over year, and assets under management reached $77 billion [8][19] - Middle market loans increased 6%, with new client acquisition up 40% [8][15] - Commercial payments fees grew 3% sequentially, with New Line revenue increasing by 31% year over year [8][19] Market Data and Key Metrics Changes - Average demand deposits were up 3% year over year, led by 6% growth in consumer demand deposit accounts (DDA) [4][17] - Consumer household growth in the Southeast was 7% year over year, significantly outpacing the underlying market growth [6][17] - The total cost of retail deposits in the Southeast averaged 1.93%, generating a spread of over 200 basis points relative to Fed funds [6][18] Company Strategy and Development Direction - The company announced a merger with Comerica, emphasizing that M&A is a means to achieve strategic objectives rather than a standalone strategy [3][4] - Focus on expanding in the Southeast and enhancing middle market sales force, with plans to open 27 more branches by year-end [6][11] - Continued investment in technology and operational efficiency to support long-term growth and scalability [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertain environments, highlighting strong operational results despite challenges [3][12] - The outlook for NII is stable to up 1% from the third quarter, with expectations for average total loan balances to increase by 1% [24][23] - Management remains optimistic about the potential for growth in technology and life sciences sectors post-merger with Comerica [50][51] Other Important Information - The company repurchased $300 million of stock and raised its common dividend by 8% [5] - The net charge-off ratio was 109 basis points for the quarter, including $178 million related to Tricolor [20][22] - The company expects to pause share repurchases until the completion of the Comerica acquisition, anticipated by the end of Q1 2026 [24] Q&A Session Summary Question: Update on the Comerica transaction and regulatory process - Management reported positive feedback from employees and communities regarding the merger, with good progress on regulatory filings expected to be completed by the end of the month [31][32] Question: Concerns about contagion risk in the NDFI portfolio - The company maintains low levels of NDFI concentrations, with robust monitoring processes in place, and has not experienced losses in this portfolio over the last decade [38][40] Question: Outlook on commercial lending and investment decisions - Management noted a mixed outlook, with some clients feeling the impact of tariffs while others are optimistic about future investments, particularly in infrastructure and AI-related sectors [45][48] Question: Potential growth from Comerica's technology and life sciences practice - The merger is expected to enhance growth opportunities in these sectors, leveraging existing strengths and expanding market presence [50][51] Question: Balance between organic expansion and integration of Comerica - Management assured that de novo expansion plans in the Southeast will continue without disruption, with resources allocated effectively to support both growth areas [54][56]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $754 million, slightly up sequentially, with adjusted EBITDA at $37 million and an adjusted EBITDA margin of 4.9%, exceeding expectations and up year on year [6][13][21] - Adjusted revenue decreased by 2.6% year over year from $774 million in Q2 2024 [13] - New business Annual Contract Value (ACV) was $150 million, up 6% year over year and 38% sequentially [11][12] Business Line Data and Key Metrics Changes - Commercial segment adjusted revenue was $365 million, down 5.9% year over year, with adjusted EBITDA of $27 million and a margin of 7.4%, down 190 basis points [14][15] - Government segment adjusted revenue decreased by 2.9% to $238 million, but adjusted EBITDA increased by 22% to $60 million, with a margin of 25.2%, up 520 basis points [16] - Transportation segment adjusted revenue increased by 7.1% to $151 million, with adjusted EBITDA of $8 million and a margin of 5.3%, up 320 basis points [17] Market Data and Key Metrics Changes - The qualified ACV pipeline remains strong at $3.3 billion, up 5% year over year and 6% since the beginning of 2025 [12] - The company expects improved performance in the Commercial segment in Q3 as some deals are pushed from Q2 [7][10] Company Strategy and Development Direction - The company is focused on portfolio rationalization, improving culture, operations, and technology, and leveraging AI to enhance capabilities [9][26] - The new Chairman of the Board, Harsh Agrawdy, is expected to contribute significantly to the company's strategic direction [9][24] - The company aims to achieve high adjusted EBITDA margins and revenue growth in the second half of the year, despite some revenue lumpiness [10][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market despite uncertainties related to tariffs, AI, and economic conditions [27][28] - The company is confident in achieving year-over-year revenue growth in the second half of 2025, although it may fall slightly short for the full year [20][21] Other Important Information - The company launched a new three-year share buyback program for $50 million and repurchased approximately 2.7 million shares at an average price of $2.7 [19][20] - The net leverage ratio remained at 2.7 turns, with expectations for reduction in Q3 and Q4 [19] Q&A Session Summary Question: Comments on the potential impacts of the big beautiful bill, particularly around the SNAP program - Management indicated that the bill presents more opportunities than impediments, with potential fraud reduction opportunities in SNAP and open loop systems [31][32][34] Question: Drivers of new business signing momentum in the Commercial segment - Management noted consistent performance in new logos and capabilities, with a need for improved performance from account managers [35][36] Question: Timing of rationalization efforts and potential news by year-end - Management confirmed that work is underway and expressed hope for developments by the end of the year [37][39] Question: AI-driven solutions and client expansion into other services - Management confirmed that clients are seeking efficiency and quality improvements through AI, which is being implemented across various initiatives [43][44] Question: Market underestimation of revenue catalysts from regulatory developments - Management acknowledged real opportunities but emphasized that implementation speed by states is crucial [46][47] Question: Talent acquisition and attrition rates - Management reported improved retention and lower attrition rates, with muted wage pressure compared to the previous year [48][51] Question: Strategic shifts under the new Chairman's leadership - Management advised not to overreact to board changes, emphasizing continuity in strategic objectives [52][55]