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Fifth Third (FITB) Q2 Earnings Beat Estimates, NII Falls Y/Y
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Fifth Third Bancorp (FITB - Free Report) has reported a second-quarter 2024 adjusted earnings per share (EPS) of 86 cents, surpassing the Zacks Consensus Estimate of 84 cents. In the prior-year quarter, the company reported an EPS of 82 cents.
Results benefited from a fall in expenses and provisions for credit losses, along with strong capital ratios. However, a decline in net interest income (NII) and lower loan and deposit balances were major headwinds.
The company has reported net income available to common shareholders of $561 million, down marginally year over year.
Revenues & Expenses Decline
Total revenues in the reported quarter were $2.08 billion, down 4.6% year over year. The top line missed the Zacks Consensus Estimate of $2.1 billion.
Fifth Third’s NII (on an FTE basis) was $1.39 billion, down 4.8% year over year. Our estimate for NII (FTE) was pegged at $1.4 billion.
The net interest margin (on an FTE basis) shrunk year over year to 2.88% from 3.10%. Our estimate for net interest margin was pinned at 2.86%.
Non-interest income declined 4.3% year over year to $695 million. This fall was primarily led by a decrease in revenues from commercial banking, mortgage banking and leasing business, as well as a decline in other non-interest income. Our estimate for the metric was pegged at $729.3 million.
Non-interest expenses decreased nearly 1% year over year to $1.22 billion. Our estimate for the metric was pinned at $1.31 billion.
As of Jun 30, 2024, average loan and lease balances, and average total deposits were $117.3 billion and $167.2 billion, respectively. Average loans and deposits each decreased marginally on a sequential basis.
Credit Quality: Mixed Bag
The company reported a provision for credit losses of $97 million, down 45.2% from the year-ago quarter. The total allowance for credit losses decreased 4.3% to $2.43 billion year over year.
Moreover, the total non-performing portfolio loans and leases were $643 million, down 2.7% from the year-ago quarter.
However, net charge-offs in the second quarter increased to $144 million or 0.49% of average loans and leases (on an annualized basis) compared with the $90 million or 0.29% witnessed in the prior-year quarter.
Capital Position Strong
The Tier 1 risk-based capital ratio was 11.90% compared with the 10.73% posted at the end of the prior-year quarter. The CET1 capital ratio was 10.6%, up from the 9.49% recorded at the end of the year-ago quarter. Also, the leverage ratio was 9.07% compared with the year-earlier quarter’s 8.81%.
Share Repurchase Activity
In the reported quarter, FITB repurchased $125 million of its common outstanding shares.
Our Viewpoint
The company’s solid capital position will aid capital distribution activities in the upcoming period, boosting investors’ confidence in the stock. Also, lower expenses and provisions will support FITB’s financials. However, the muted loan demand and lower deposit growth are major concerns.
Fifth Third Bancorp Price, Consensus and EPS Surprise
First Horizon Corporation's (FHN - Free Report) adjusted earnings per share (excluding notable items) of 36 cents missed the Zacks Consensus Estimate by a penny. Moreover, the figure declined 7.7% year over year.
FHN's results were adversely impacted by a fall in NII and non-interest income. Also, lower deposits and higher provisions were other negatives. Nonetheless, lower expenses and an increase in loan balances offered some relief.
F.N.B. Corporation's (FNB - Free Report) adjusted earnings per share of 34 cents lagged the Zacks Consensus Estimate by a penny. Moreover, the bottom line declined 12.8% from the prior-year quarter.
FNB's results were primarily affected by higher provisions, higher expenses, and lower NII. Nonetheless, a higher non-interest income and a rise in average loans and deposit balances offered some support.
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Fifth Third (FITB) Q2 Earnings Beat Estimates, NII Falls Y/Y
Fifth Third Bancorp (FITB - Free Report) has reported a second-quarter 2024 adjusted earnings per share (EPS) of 86 cents, surpassing the Zacks Consensus Estimate of 84 cents. In the prior-year quarter, the company reported an EPS of 82 cents.
Results benefited from a fall in expenses and provisions for credit losses, along with strong capital ratios. However, a decline in net interest income (NII) and lower loan and deposit balances were major headwinds.
The company has reported net income available to common shareholders of $561 million, down marginally year over year.
Revenues & Expenses Decline
Total revenues in the reported quarter were $2.08 billion, down 4.6% year over year. The top line missed the Zacks Consensus Estimate of $2.1 billion.
Fifth Third’s NII (on an FTE basis) was $1.39 billion, down 4.8% year over year. Our estimate for NII (FTE) was pegged at $1.4 billion.
The net interest margin (on an FTE basis) shrunk year over year to 2.88% from 3.10%. Our estimate for net interest margin was pinned at 2.86%.
Non-interest income declined 4.3% year over year to $695 million. This fall was primarily led by a decrease in revenues from commercial banking, mortgage banking and leasing business, as well as a decline in other non-interest income. Our estimate for the metric was pegged at $729.3 million.
Non-interest expenses decreased nearly 1% year over year to $1.22 billion. Our estimate for the metric was pinned at $1.31 billion.
As of Jun 30, 2024, average loan and lease balances, and average total deposits were $117.3 billion and $167.2 billion, respectively. Average loans and deposits each decreased marginally on a sequential basis.
Credit Quality: Mixed Bag
The company reported a provision for credit losses of $97 million, down 45.2% from the year-ago quarter. The total allowance for credit losses decreased 4.3% to $2.43 billion year over year.
Moreover, the total non-performing portfolio loans and leases were $643 million, down 2.7% from the year-ago quarter.
However, net charge-offs in the second quarter increased to $144 million or 0.49% of average loans and leases (on an annualized basis) compared with the $90 million or 0.29% witnessed in the prior-year quarter.
Capital Position Strong
The Tier 1 risk-based capital ratio was 11.90% compared with the 10.73% posted at the end of the prior-year quarter. The CET1 capital ratio was 10.6%, up from the 9.49% recorded at the end of the year-ago quarter. Also, the leverage ratio was 9.07% compared with the year-earlier quarter’s 8.81%.
Share Repurchase Activity
In the reported quarter, FITB repurchased $125 million of its common outstanding shares.
Our Viewpoint
The company’s solid capital position will aid capital distribution activities in the upcoming period, boosting investors’ confidence in the stock. Also, lower expenses and provisions will support FITB’s financials. However, the muted loan demand and lower deposit growth are major concerns.
Fifth Third Bancorp Price, Consensus and EPS Surprise
Fifth Third Bancorp price-consensus-eps-surprise-chart | Fifth Third Bancorp Quote
Currently, 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 Finance Stocks
First Horizon Corporation's (FHN - Free Report) adjusted earnings per share (excluding notable items) of 36 cents missed the Zacks Consensus Estimate by a penny. Moreover, the figure declined 7.7% year over year.
FHN's results were adversely impacted by a fall in NII and non-interest income. Also, lower deposits and higher provisions were other negatives. Nonetheless, lower expenses and an increase in loan balances offered some relief.
F.N.B. Corporation's (FNB - Free Report) adjusted earnings per share of 34 cents lagged the Zacks Consensus Estimate by a penny. Moreover, the bottom line declined 12.8% from the prior-year quarter.
FNB's results were primarily affected by higher provisions, higher expenses, and lower NII. Nonetheless, a higher non-interest income and a rise in average loans and deposit balances offered some support.