Banks
Fifth Third beats on profit as the Comerica deal starts to pay off
Adjusted earnings came in well ahead of forecasts, and returns on equity hit their best level since 2022.
HedgeWeekly News Desk ·
Fifth Third Bancorp reported adjusted third-quarter earnings of $1.13 a share on Monday, comfortably ahead of analyst estimates. Reported earnings were $0.90 a share after $0.23 of charges tied to the Comerica merger, interchange litigation and technology write-downs.
Net interest income rose 3% from the prior quarter to $2.28 billion, although the net interest margin narrowed by two basis points to 3.34%. Adjusted fee income reached $1.05 billion, up 33% from a year earlier as the enlarged bank began to show its scale. Adjusted return on tangible common equity climbed to 20.6%, the highest since the fourth quarter of 2022.
The bank finished the systems conversion for Comerica over Labor Day weekend, a project management described as the largest in its 168-year history. It now expects to hit its full $850 million cost savings run-rate in the fourth quarter. Shares rose about 1.8% to $51.28 after the release.