Executive Summary

Fifth Third delivered solid Q3 with adjusted EPS of $0.93, above S&P Global consensus of $0.867, while revenue came in below consensus on S&P’s basis ($2.10B actual vs $2.29B est.). Total revenue (company FTE basis) rose to $2.31B on continued NIM expansion and stronger fees; one-off credit charge amplified GAAP loss content but was isolated. EPS beat; revenue miss. *
Credit costs spiked as the bank took a $178M impairment on an asset‑backed finance exposure; headline NCO ratio rose to 1.09% (ex‑item: ~0.52%). Management characterized the issue as idiosyncratic; NPAs improved QoQ.
Capital/liquidity remained strong (CET1 10.54%; LCR 126%; loan/core deposit ratio 75%); $300M of stock repurchases executed in Q3; management plans to pause buybacks pending the Comerica close (target end-Q1’26).
Q4 outlook: average loans +1%, NII stable to +1%, fees +2–3%, expenses +~2%, NCO ~40 bps, ETR 23%. Deposit betas guided to ~30% near term as the bank prioritizes balanced funding ahead of Comerica integration.

What Went Well and What Went Wrong

What Went Well
- Positive operating leverage continued; NIM expanded for the 7th straight quarter to 3.13%, NII (FTE) grew to $1.525B, and adjusted efficiency improved to 54.1% (‑180 bps YoY). “Strong revenue growth and expense discipline” underpinned results.
- Fee momentum broad-based: capital markets fees +28% QoQ on syndication/M&A rebound; wealth & asset management +9% QoQ, +11% YoY on AUM growth.
- Balance sheet/returns resilient: CET1 10.54%, ROA 1.21% (adj. 1.25%), ROTCE 17.3% (adj. 17.7%); TBV/share up 7% YoY; liquidity sources rose to $107B.
- CEO tone: “strong balance sheet, diverse revenue streams, and disciplined expense management… highest annual adjusted PPNR growth in over two years.”
What Went Wrong
- Outsized credit event: NCO ratio rose to 1.09% on a $178M impairment in asset‑backed finance; ex-item NCO was 0.52%, still up 7 bps QoQ.
- Headline revenue miss vs S&P consensus (company-reported FTE total revenue increased, but S&P revenue basis registered below estimates), and securities gains net fell 38% QoQ. *
- Expenses excluding certain items and non‑qualified deferred comp rose 2% QoQ on investments in branches/technology; occupancy/equipment also higher.

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Diluted EPS ($)	0.78	0.88	0.91
Adjusted EPS ($)	—	—	0.93
Total Revenue (FTE) ($B)	2.14	2.25	2.31
Net Interest Income (FTE) ($B)	1.43	1.50	1.53
Noninterest Income ($B)	0.71	0.75	0.78
Net Interest Margin (FTE) (%)	2.90	3.12	3.13
Efficiency Ratio (FTE) (%)	58.2	56.2	54.9
ROA (%)	1.06	1.20	1.21
CET1 (%)	10.75	10.58	10.54
Net Charge-off Ratio (%)	0.48	0.45	1.09

Vs Estimates (S&P Global basis)

EPS: $0.93 actual vs $0.867 est. — beat*
Revenue: $2.104B actual vs $2.292B est. — miss*
Values retrieved from S&P Global.*

Noninterest Income Detail ($MM)

Category	Q3 2024	Q2 2025	Q3 2025
Wealth & Asset Mgmt	163	166	181
Commercial Payments	154	152	157
Consumer Banking	143	147	144
Capital Markets Fees	111	90	115
Commercial Banking	93	79	87
Mortgage Banking Net	50	56	58
Other Noninterest	(13)	44	29
Securities Gains (Net)	10	16	10
Total Noninterest Income	711	750	781

Selected KPIs and Credit

Average portfolio loans & leases ($B): 116.8 → 123.1 → 123.3 (YoY → Q2 → Q3).
Average deposits ($B): 167.2 → 163.6 → 164.8.
Rate on interest-bearing deposits: 3.03% (Q3’24) → 2.39% (Q2’25) → 2.41% (Q3’25).
NPL ratio: 0.59% → 0.70% → 0.62%; NPA ratio: 0.62% → 0.72% → 0.65%.
ACL ratio: 2.09% → 2.09% → 1.96%.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Avg Loans & Leases	Q4 2025 vs Q3 2025	—	Up ~1%	New
NII (FTE)	Q4 2025 vs Q3 2025	—	Stable to up ~1% (3Q25 baseline $1.525B)	New
Noninterest Income (ex sec g/l)	Q4 2025 vs Q3 2025	—	Up 2–3% (3Q25 baseline $789MM)	New
Noninterest Expense (ex items & NQDC)	Q4 2025 vs Q3 2025	—	Up ~2% (3Q25 baseline $1.253B)	New
Net Charge-off Ratio	Q4 2025	Q3 guide 45–49 bps (from Q2 call highlights)	~40 bps	Lower
Effective Tax Rate	Q4 2025	—	~23%	New
Deposit Betas	4Q25–1Q26	—	~30% near term	New
Share Repurchases	Through Close	$300MM executed in Q3	Pausing until Comerica close (target ~end Q1’26)	Pause

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
NII/NIM & Deposit Betas	Q1: NIM up to 3.03% on mix and repricing; IB liabilities cost down 20 bps; guided FY NII +5–6% (assumes 3.75% FFR YE).	NIM 3.13%; NII (FTE) $1.525B; deposit betas guided ~30% near term as bank balances funding ahead of Comerica.	Positive NIM trajectory; more conservative betas near-term.
Credit/NDFI	Q2: NCOs guided 45–49 bps; NPAs -11% QoQ; Q2 EPS $0.88.	One-off $178M asset-backed impairment lifted NCO to 1.09%; management framed as idiosyncratic; consumer NCOs down 4 bps QoQ.	Idiosyncratic spike; underlying trend manageable.
Comerica Merger	Not applicable in Q1; announced mid-Oct.	Integration approach: use FITB platforms; pause buybacks; aim for synergy realization; regulatory filings progressing; Category readiness plan in place.	Constructive; execution-focused.
Direct Express Program	—	Transition benefits: ~$3.5B average DDA; fee margin 15–20% vs cost; supports funding mix over time.	Accretive funding/fees.
Branch/SE Expansion	Q1: Ongoing SE buildout; digital metrics improving.	40 of 50 2025 branches in 2H; no disruption from Comerica integration; modular playbook continues.	Continued expansion; scalable.
Regulation/Category	—	Becoming larger category post-combination; 2052a cadence, reporting uplift planned and budgeted.	Managed, known cost path.

Management Commentary

CEO Tim Spence (press release): “We’ve continued to expand our net interest margin, improve our pre‑provision net revenue, and strengthen our efficiency ratio… our strong returns on capital enabled $300 million of share repurchases in the quarter and a 7% increase in tangible book value per share over the past year.”
CFO Bryan Preston on deposit betas/NII: “We’re going to run a little bit lower on our betas from here… expect… 30% [for 4Q/1Q]… rationale for ‘stable to up 1%’ NII forecast for 4Q.”
On Comerica integration: “There is no debate about which technology platforms we’re going to use… Comerica customers and business are going to move… to Fifth Third… we’re not doing systems integration and conversion on top of one another.”
On Direct Express: “About $3.5B of DDA… fee margin 15–20% relative to expense… upside as government reduces paper checks.”

Q&A Highlights

Credit/NDFI exposure: management emphasized the isolated nature of the asset‑backed impairment; broader NDFI exposure characterized by large, long‑tenured counterparties; combined NDFI balance expected ~7% post‑Comerica.
Funding strategy and betas: prioritizing balanced retail funding and liquidity optionality into close; deposit betas ~30% near term; supports 4Q NII “stable to +1%”.
Integration execution: using Fifth Third as the receiving platform reduces tech risk; sequencing and customer experience focus (e.g., app credentials, staffing) to avoid friction.
Regulatory category readiness: workplans for 2052a and credit reporting; conversion timelines agreed with regulators; costs “manageable” and reflected in outlook.
Branch expansion continuity: SE de novo cadence continues; resource separation avoids disruption while planning Texas expansion post‑close.

Estimates Context

EPS: $0.93 actual vs $0.867 consensus — beat of ~$0.06.*
Revenue: $2.104B actual (S&P basis) vs $2.292B consensus — miss of ~$0.19B.*
Estimate depth: 15 EPS estimates; 13 revenue estimates.*
Values retrieved from S&P Global.*

Implications: EPS outperformance despite an idiosyncratic credit loss reflects core spread/fee strength and expense discipline; S&P revenue miss stems from basis differences and weaker other income lines vs consensus, despite higher FTE revenue. *

Key Takeaways for Investors

Core earnings power intact: NIM expansion, fee momentum, and operating discipline drove an EPS beat despite elevated credit cost.
Credit event looks isolated; ex‑item loss content tracks guidance trajectory (4Q NCO ~40 bps). Watch subsequent updates on the asset‑backed exposure and NDFI portfolio performance.
Near-term playbook: expect steady NII into 4Q with conservative deposit betas as management preserves funding flexibility ahead of Comerica.
Catalyst path: Direct Express balances/fees, Comerica synergy detail, and Texas/SE branch scaling can add medium-term NII/fee tailwinds.
Capital resilient; TBV accretion ongoing with AOCI improvement; CET1 >10.5% supports strategic optionality (M&A integration, organic growth).
Stock reaction drivers: clarity on credit normalization (ex‑item), 4Q NII trajectory vs guide, and merger timeline milestones (regulatory filings, synergy specifics).

Footnotes:

Values retrieved from S&P Global.

FIFTH THIRD BANCORP (FITBI)·Q3 2025 Earnings Summary