Fifth Third Bancorp Earnings - Q4 2025 Analysis & Highlights
Fifth Third Bancorp reported strong Q4 2025 results with record full-year net interest income, announced the completion of regulatory approvals for the Comerica merger with an accelerated February 1 closing, and provided comprehensive 2026 guidance reflecting significant integration opportunities and continued organic growth momentum.
Key Financial Results
Earnings per share of $1.04, or $1.08 excluding certain items.
Adjusted return on equity of 14.5%, adjusted return on assets of 1.41%, and adjusted efficiency ratio of 54.3%, all among the best of all banks regardless of size.
Adjusted fourth quarter revenues rose 5% year-over-year, driven by 6% growth in net interest income, 8% growth in commercial payments fees, and 13% growth in wealth and asset management fees.
Record full year net interest income of $6 billion, which is 2.5% above the prior record.
Full year total revenue of $9 billion.
Net charge-offs of 40 basis points for the quarter, the lowest level in the past seven quarters.
Non-performing assets decreased for the third consecutive quarter.
CET1 ratio increased to 10.8%.
Tangible book value per share grew 21% year-over-year.
Adjusted return on average tangible common equity excluding AOCI of 16.2%.
Adjusted PPNR for the quarter was over $1 billion, a 6% increase from the prior year.
Capital returned to shareholders of $1.6 billion in 2025.
Business Segment Results
Commercial loans grew 4% on an average basis, and excluding CRE categories, increased 5% year-over-year.
Middle market loans increased 7% year-over-year.
Small Business balances increased by $1 billion over last year.
Commercial production accelerated during the fourth quarter, rising 20% sequentially to a multi-year high.
Consumer loans grew 6% on an average basis compared to last year.
Auto lending accelerated in 2025, growing 11%.
Home equity lending grew 16%, with the company achieving number two origination market share in HELOC within its footprint, up from number four in the prior year.
Wealth fees increased by 13% over last year, driven by $11 billion in AUM growth.
Capital market fees increased 5% sequentially.
Commercial payment fees increased 8% year-over-year and 6% sequentially.
Newline-related deposits reached $4.3 billion, up $1.4 billion from a year ago, with revenues more than doubling compared to the fourth quarter of last year.
Fifth Third Wealth Advisors AUM and fees increased 50% from a year ago.
Fifth Third Securities generated record fees.
Private Bank had its second highest level of gross AUM flows in recorded history.
Capital Allocation
Dividend remains a priority as the company continues to pay a strong, stable dividend.
Share repurchases were paused until the Comerica transaction closes, with regular quarterly share repurchases expected to resume in the second half of 2026.
Capital return priorities are paying a strong, stable dividend, organic growth, and then share repurchases.
$1.6 billion of capital returned to shareholders in 2025.
Industry Trends and Dynamics
Industry loan growth continues to be concentrated in lending to non-depository financial institutions, which represented approximately 60% of total industry loan growth and virtually all non-real estate and non-consumer-related loan growth in the second half of 2025.
Commercial revolver utilization decreased during the government shutdown in October and November but stabilized in December at 35%, down from 36.7% in the third quarter.
Utilization decrease was driven by corporate banking and CRE as primary drivers.
Home prices remain strong, supporting continued home equity production.
Housing turnover remains low, supporting home equity lending opportunities.
Competitive Landscape
Consumer mobile app was recognized by J.D. Power as the top mobile banking app for user satisfaction among regional banks.
Small Business finished number two in J.D. Power's 2025 National Small Business Banking Satisfaction Study, ahead of all other regional banks.
Fifth Third became a top 20 national SBA lender for the first time.
De novo branches continue to deliver deposit growth that is 45% higher than peer de novo branches.
New client acquisition increased 40% across all regions compared to 2024.
Macroeconomic Environment
2025 was a more eventful year from a macroeconomic and policy uncertainty perspective than expected.
Unemployment is assumed to reach 4.7% in the baseline case and 8.4% in the downside case for 2026.
Forward curve at the start of January assumed 25 basis-point rate cuts in March and July.
10-year Treasury rate decreased by only 4 basis points despite significant portfolio management.
Tax reform is expected to support capital investment decisions by clients.
Chronic postponement syndrome is a tendency for clients to postpone large capital investments in the face of uncertainty.
Growth Opportunities and Strategies
Southeast expansion included opening 50 new branches in 2025, including the 200th branch in Florida and 100th branch in the Carolinas.
Fifth Third Florida, as a stand-alone bank, would have the 44th largest branch network in the US, and Fifth Third Carolinas would have the 78th largest.
Net new consumer households grew 2.5% year-over-year with the Southeast growing households by 7%, highlighted by 10% growth in Georgia and 9% in the Carolinas.
Digital transformation included shipping over 400 updates to the consumer mobile app during 2025, including direct deposit switching, financial wellness hub, and free estate planning capabilities.
Provide fintech was asked to lead all of Small Business for Fifth Third, resulting in top 20 national SBA lender status.
Commercial payments software-enabled managed services including Big Data Healthcare, Expert AR and AP, and DTS Connex continue to grow rapidly.
Newline embedded payments platform continued to grow rapidly with revenues more than doubling.
Newline launched a Model Context Protocol server to enable secure, standardized access to APIs and documentation to AI agents, a first among US banks.
Value stream programs through automation and process redesign reached $200 million in annualized run rate savings.
Comerica merger is expected to deliver $850 million in expense synergies.
Revenue synergies of more than $0.5 billion are expected over the next five years across four areas: scaling Comerica's middle market platform, deepening client relationships, building out retail banking with the Fifth Third playbook and 150 Texas de novo branches, and creating a differentiated innovation banking business.
Texas de novo program will include 150 branches, with 43 locations already having letters of intent either complete or in process.
Southeast de novo program has now secured all locations.
Targeted analytical marketing in legacy Comerica branches is planned to improve the combined company's funding profile.
Direct Express program expansion is planned through technology platform upgrades and feature builds to support government agency partnerships.
Financial Guidance and Outlook
Full year 2026 net interest income expected to range between $8.6 billion and $8.8 billion.
Net interest margin expected to increase approximately 15 basis points upon close of the Comerica transaction.
NIM improvement is driven by 4-5 basis points from discount accretion on marked investment securities, 4-5 basis points from repositioning remaining securities, 3-4 basis points from cash flow hedge repositioning, and 2-3 basis points from funding synergies and balance sheet mix.
Full-year average total loans expected to be in the mid-$170 billion range.
Full-year adjusted noninterest income expected to be between $4 billion and $4.4 billion.
Full-year noninterest expense expected to be between $7 billion and $7.3 billion, excluding CDI amortization and acquisition-related charges.
Expense synergies of 37.5% of the $850 million annualized run rate expected to be realized in 2026.
Full-year adjusted revenue and adjusted PPNR excluding CDI amortization expected to be up 40% to 45% over 2025.
Positive operating leverage of another 100 basis points to 200 basis points expected.
Exit 2026 at or near profitability and efficiency levels consistent with 2027 targets announced with the acquisition.
2026 net charge-offs expected to range between 30 basis points and 40 basis points.
CET1 capital post-close expected to remain near 10.5% target.
9% EPS accretion from the Comerica deal expected to be delivered in the fourth quarter of 2026.
Stand-alone Fifth Third would have delivered mid single-digit loan growth and mid to upper single-digit revenue growth with 100-200 basis points of positive operating leverage.
Comerica transaction expected to close on February 1, with systems conversion anticipated around the end of the third quarter, later moved up to Labor Day.
No first quarter 2026 guidance provided due to the magnitude of the merger impact.
Merger Integration and Comerica Acquisition
Regulatory approvals received in less than 70 days after filing the application.
Legal day one expected on February 1.
Systems conversion moved up to Labor Day from mid-October timeframe.
Bottoms-up review will be conducted name by name to identify opportunities for balance sheet capacity and product capabilities.
Consumer deposit marketing campaign of 13-14 million pieces of mail planned over the course of 2026, with the first million pieces going out within the first two weeks of legal day one.
Over 40 of the 150 Texas locations already secured due to relationships with development partners.
Texas de novo branches expected to come out of the ground faster than Southeast expansion due to existing relationships.
Innovation banking business combining Comerica's Tech and Life Sciences vertical with Fifth Third's Newline platform represents a blue-sky opportunity.
Rate sensitivity will be managed to remain relatively rate neutral through swaps and hedges, with the combined company likely to be slightly asset-sensitive.
Balance sheet mix targets of 60-40 commercial-to-consumer loan mix and 60-40 consumer-to-commercial deposit mix will be pursued over multiple years.
Texas household growth expected at north of 10% on an annualized basis.
Potential to deliver better than 37.5% of the $850 million in expense synergies in 2026, approaching $400 million of end-year expense saves with $40 million reinvested in growth.
