FIFTH THIRD BANCORP (FITB) Q4 2024 Earnings Summary

Executive Summary

Reported diluted EPS was $0.85; adjusted EPS was $0.90 as interchange litigation and a foundation contribution were partly offset by an FDIC special assessment update and a tax benefit . NII rose 1% QoQ and NIM expanded 7 bps to 2.97% on deposit cost reductions and fixed‑rate asset repricing .
Fee momentum: adjusted noninterest income rose 6% QoQ and 5% YoY; capital markets +11% QoQ/+16% YoY, commercial payments +1% QoQ/+7% YoY, wealth & asset management +3% QoQ/+11% YoY .
Credit metrics were stable-to-improving: NCO ratio fell 2 bps QoQ to 0.46%, NPL ratio increased to 0.69% with commercial inflows; ACL/loans was ~2.08% and CET1 ended at 10.51% after $300M buyback .
2025 outlook: management guided to record NII, full‑year positive operating leverage, loans +3–4%, adjusted fees +3–6%, and adjusted expenses +3–4%; Q1’25 NII flat QoQ with seasonal expense step‑up (~$100MM) .
Near‑term catalysts: reiterated “record 2025 NII” and positive operating leverage; continued capital return ($300M Q4 repurchase; planned $225M buyback in Q1’25); prime rate cut to 7.50% in Dec supports deposit cost trajectory and floating loan yields reset context .

What Went Well and What Went Wrong

What Went Well
- “We remain confident in achieving record NII in 2025 and delivering full year positive operating leverage across a range of interest rate environments.” – CFO Bryan Preston . NIM rose 7 bps QoQ to 2.97% on a 38 bps decline in interest‑bearing liability costs .
- Fee growth from strategic investments: adjusted noninterest income +6% QoQ/+5% YoY; capital markets syndication/M&A strength and wealth AUM growth to $69B drove double‑digit YoY fee increases .
- Expense discipline: adjusted efficiency ratio improved to 54.7%; adjusted expenses fell 1% QoQ .
What Went Wrong
- NPL/NPA increased: NPLs rose to $823MM (0.69% of loans) and NPAs to $853MM (0.71%) on commercial inflows; management expects a large NPA inflow to pay down in H1’25, but it pressured coverage ratios sequentially .
- Reported EPS impacted by litigation/foundation items (−$0.05); interchange litigation reduced noninterest income by $51MM and increased expense $4MM .
- CET1 dipped 24 bps QoQ to 10.51% on loan growth/RWA expansion despite buybacks; pro forma CET1 incl. AOCI remains a watchpoint amid long‑end rate volatility .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Diluted EPS ($)	$0.72	$0.78	$0.85
Adjusted EPS ($)	$0.98	$0.85	$0.90
Net Interest Income (FTE, $MM)	$1,423	$1,427	$1,443
Net Interest Margin (FTE, %)	2.85%	2.90%	2.97%
Noninterest Income ($MM)	$744	$711	$732
Adjusted Noninterest Income excl. securities ($MM)	$750	$748	$791
Noninterest Expense ($MM)	$1,455	$1,244	$1,226
Adjusted Noninterest Expense ($MM)	$1,211	$1,225	$1,218
Efficiency Ratio (FTE, %)	67.2%	58.2%	56.4%
Adjusted Efficiency Ratio (%)	55.3%	56.1%	54.7%
Return on Avg Assets (%)	0.98%	1.06%	1.17%
Net Charge-Off Ratio (%)	0.32%	0.48%	0.46%
NPL Ratio (%)	0.55%	0.59%	0.69%
CET1 (%)	10.29%	10.75%	10.51%
Avg Deposits ($MM)	$169,447	$167,196	$167,237
Avg Portfolio Loans ($MM)	$118,858	$116,826	$117,860

Segment results (Q4 2024):

Segment	NII (FTE) $MM	Noninterest Inc $MM	Noninterest Exp $MM	IBT $MM	Net Income $MM
Commercial Banking	623	375	(464)	513	422
Consumer & Small Business	959	276	(605)	541	428
Wealth & Asset Mgmt	48	103	(94)	57	45
General Corp & Other	(187)	(22)	(63)	(341)	(275)

KPIs and balance mix:

KPI	Q4 2023	Q3 2024	Q4 2024
Rate on interest‑bearing liabilities (%)	3.34%	3.38%	3.00%
DDA % of core deposits	24%	24%	24%
Loan‑to‑core deposit ratio (%)	72%	71%	73%
Wholesale funding avg ($MM)	$26,115	$23,415	$20,202

Estimate comparison:

Metric	Q4 2024 Actual	Q4 2024 Consensus	Surprise
EPS (diluted)	$0.85	Unavailable (S&P Global request limit)	N/A
Revenue (FTE, $MM)	$2,175	Unavailable (S&P Global request limit)	N/A

Note: Wall Street consensus estimates from S&P Global were unavailable at the time of this analysis due to API limit.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Income (adjusted)	FY 2025 vs FY 2024	N/A	Up 5–6%	Raised vs flat prior trajectory
Noninterest Income (adjusted, excl. sec.)	FY 2025 vs FY 2024	N/A	Up 3–6%	Raised
Noninterest Expense (adjusted)	FY 2025 vs FY 2024	N/A	Up 3–4%	Raised
Avg Loans & Leases	FY 2025 vs FY 2024	N/A	Up 3–4%	Raised
Net Charge‑Off Ratio	FY 2025	40–49 bps	40–49 bps	Maintained
Effective Tax Rate	FY 2025	22%	22%	Maintained
ACL Build	FY 2025	N/A	~$50–$100MM build	New detail
Net Interest Income (adjusted)	Q1 2025 vs Q4 2024	N/A	Flat QoQ	New detail
Noninterest Income (adjusted, excl. sec.)	Q1 2025 vs Q4 2024	N/A	Down 7–8% (seasonality; excl. securities g/l)	New detail
Noninterest Expense (adjusted)	Q1 2025 vs Q4 2024	N/A	Up ~8% (seasonal ~$100MM)	New detail
Avg Loans & Leases	Q1 2025 vs Q4 2024	N/A	Up ~2%	New detail
Net Charge‑Off Ratio	Q1 2025	45–49 bps	45–49 bps	Maintained
Effective Tax Rate	Q1 2025	22%	22%	Maintained

FY 2024 (actual vs January 2024 guide context): delivered adjusted results in line with early‑year guidance (NII stable/down modestly, fees up, expenses down slightly), and returned $1.6B of capital while increasing capital ratios .

Earnings Call Themes & Trends

Topic	Q2 2024	Q3 2024	Q4 2024	Trend
NII/NIM trajectory & deposit betas	First sequential NII/NIM inflection; interest‑bearing core deposit costs up only 4 bps QoQ; testing depositor price sensitivity	Further NII/NIM growth expected; deposit costs began to decline after rate cuts; mid‑40s cumulative beta achieved; CDs maturing to aid costs	NIM +7 bps QoQ; interest‑bearing liability costs −38 bps QoQ; management expects record 2025 NII	Improving
Loan growth & pipelines	C&I softness; consumer fixed‑rate origination repricing helps yields	Middle market production highest in 5 quarters; record pipelines; utilization stabilized; shared national credit declines moderating	Period‑end loans +3% commercial and +2% consumer QoQ; record middle‑market pipelines into 2025	Improving
CRE credit quality	Non‑owner‑occupied CRE <10% of loans; office ~1% of loans; LTM NCOs near zero	CRE NPA ratio 46 bps; no net charge‑offs; low criticized ratios	CRE metrics stable; peer‑low concentration; no CRE NCO pressure	Stable/benign
Capital & AOCI accretion	CET1 10.60%; stress capital buffer 3.2%; AOCI accretion expected over time	CET1 10.75%; pro forma CET1 incl. AOCI 8.7%; projected accretion >2025	CET1 10.51% after buyback; pro forma CET1 incl. AOCI 8.1%; ~18% AOCI accretion by YE’25 (forward curve)	Strong, with buybacks
Fee franchises	Commercial payments +12% YoY; wealth +11% YoY	Payments +10% YoY; wealth record fees; capital markets rebound	Payments +7% YoY; wealth +11% YoY; capital markets +16% YoY	Sustained growth
Southeastern branch expansion	30–35/year build, accelerating; deposit share gains	19 de novos in Q4 plan; #1 retail deposit growth; accelerating builds through 2028	21 branches opened in 2024; plan ~50 new in Southeast in 2025; early‑stage payoff	Accelerating

Management Commentary

Strategy and 2025 outlook: “We remain confident in achieving record NII in 2025 and delivering full year positive operating leverage across a range of interest rate environments.” – Bryan Preston . “Our credit portfolio remains well diversified and proactively managed and the risks are well understood.” – Timothy Spence .
Fee momentum: “Our commercial payments business grew fee revenues by 8% in 2024, and we processed $17 trillion in volume… nearly 40% of all new commercial payments relationships have no credit attached.” – Timothy Spence .
Deposit costs: “Proactive balance sheet management resulted in a 35 basis point reduction in the cost of interest-bearing deposits… interest‑bearing core deposits peaked at 2.9% in August, and were down to 2.49% in December.” – Bryan Preston .
Capital return: “We returned $1.6 billion of capital… resumed share repurchases… raised our dividend.” – Timothy Spence .

Q&A Highlights

Loan demand: Record middle‑market pipelines, modest utilization uptick (~36%); management sees improving backdrop but cautions against extrapolating outsized growth .
Deposit rate outlook: Further cost relief into Q1 from full‑quarter impact of December Fed cut; ~$8B CDs at ~4.3% maturing in Q1’25 provide flexibility .
CET1 including AOCI: Target “north of 8%” and improving via pull‑to‑par; buybacks paced against loan growth and CET1 ~10.5% operating target .
NIM path: Expect a few bps improvement each quarter in 2025; 3.20% NIM seen as achievable in this rate environment over time .
Expansion/payments: Southeast branch payoff in early innings (weighted average age ~3 years), ramping to ~50 builds in 2025; commercial payments disclosures show overweight payments franchise vs peers .

Estimates Context

S&P Global consensus EPS and revenue for Q4’24 were unavailable at the time of this analysis due to API request limits; as a result, we cannot quantify a beat/miss versus consensus.
Given management’s reiterated 2025 NII and operating leverage guidance, and stronger‑than‑expected fee performance (capital markets/wealth/payments), estimates for 2025 NII and fees may need upward adjustment; Q1’25 seasonality in expenses and fees (cards, capital markets) should be reflected in near‑term models .

Key Takeaways for Investors

Core earnings quality improved: NIM expansion (+7 bps QoQ) and adjusted efficiency ratio at 54.7% underpin PPNR momentum heading into 2025 .
Fee diversification is working: Payments/wealth/capital markets drove adjusted noninterest income +6% QoQ/+5% YoY, reducing cyclicality risk .
Credit stable; watch commercial NPAs: NCO ratio modestly lower QoQ; NPLs increased on a handful of commercial names with expected resolution in H1’25 .
Capital return continues with discipline: CET1 10.51% after $300M buyback; planned $225M in Q1’25 buybacks; AOCI accretion supports tangible equity over multi‑year horizon .
2025 setup: Loans +3–4%, adjusted NII +5–6%, adjusted fees +3–6%, adjusted expenses +3–4% → positive operating leverage; NIM expected to grind higher .
Near‑term modeling: Q1’25 NII flat QoQ; fees seasonally down 6–8%; expenses up ~8% with ~$100MM seasonal items; adjust quarterly cadence accordingly .
Macro sensitivity: Prime rate reductions (7.50% as of Dec 18) and deposit beta management support liability cost tailwinds; curve steepening would be an incremental NII lever .

Additional Notes and Sources

Q4 2024 earnings release and data tables .
Q4 2024 earnings presentation & segment detail .
Q4 2024 earnings call transcript – prepared remarks and Q&A .
Prior quarters for trend analysis (Q3’24 and Q2’24 8-Ks and calls) .