Fifth Third Bancorp — Third Quarter 2026 Earnings Summary

Financial Performance

• Net income available to common shareholders was $828 million, a 9% increase from $763 million in the second quarter of 2026 and a 36% increase from $608 million in the third quarter of 2025.
• Diluted earnings per share (EPS) were $0.90, up from $0.83 in the prior quarter and down 1% from $0.91 in the prior year quarter.
• Adjusted EPS was $1.13, excluding $0.23 of certain items including merger-related charges, interchange litigation matters, and technology-related asset impairments.
• Net interest income (FTE) increased 3% sequentially to $2.276 billion and 49% year-over-year to $2.276 billion.
• Noninterest income was $1.008 billion, a 5% decrease sequentially but a 29% increase year-over-year.
• Noninterest expense was $2.049 billion, a 3% decrease sequentially and a 62% increase year-over-year.
• Return on average assets (ROA) was 1.14%, compared to 1.08% in the prior quarter and 1.21% in the prior year quarter.
• Return on average tangible common equity (ROTCE) was 16.6%, up from 15.6% in the prior quarter and down from 17.3% in the prior year quarter.
• Net interest margin (FTE) was 3.34%, down 2 basis points from the prior quarter and up 21 basis points from the prior year quarter.
• The efficiency ratio was 62.4%, improving from 64.3% in the prior quarter but higher than 54.9% in the prior year quarter.
• Average portfolio loans and leases were $179.244 billion, up 1% sequentially and 45% year-over-year.
• Average deposits were $238.344 billion, up 3% sequentially and 45% year-over-year.
• Net charge-off ratio was 0.31% for the quarter, compared to 0.30% in the prior quarter and 1.09% in the prior year quarter.
• The allowance for credit losses (ACL) was $3.131 billion, or 1.74% of portfolio loans and leases.
• CET1 capital ratio was 10.02%, up from 9.93% in the prior quarter.

Guidance and Future Outlook

• Management stated the company is building a Fifth Third that is "better and not just bigger," guided by operating priorities of stability, profitability, and growth.
• The company noted it is building a stronger balance sheet with sustained deposit share gains in the Southeast and new share gains in Michigan, Texas, and California.
• No specific forward-looking numerical guidance for future quarters was provided in the release.

Business Segments and Product Lines

• Wealth and asset management revenue increased 43% year-over-year to $259 million, driven by higher institutional trust and personal asset management revenue.
• Commercial payments revenue increased 63% year-over-year to $256 million, with growth in deposit fees offset by higher earnings credits.
• Commercial banking revenue increased 47% year-over-year to $128 million.
• Capital markets fees decreased 5% sequentially to $147 million, as late-quarter market volatility slowed M&A advisory and loan syndication activity.
• Mortgage banking net revenue increased 21% sequentially to $47 million but decreased 19% year-over-year.
• Consumer household growth was 7% in the Southeast and 8% in the Southwest.
• The company generated 70% more commercial new quality relationships compared to the third quarter of 2025.
• Deposit share gains were recorded in Texas and California, with capped deposits in Dallas, Houston, and Austin each up more than 20% year-over-year.
• Southeast deposit growth was more than five times the market rate.

Market and Competitive Landscape

• Competition for deposits is described as "heating up" in a more volatile world.
• The company maintains multiple sources of low-cost deposits and limited exposure to borrowers most sensitive to higher rates.
• Sustained deposit share gains were reported in the Southeast, while new share gains occurred in Comerica's Michigan, Texas, and California markets.

Risks and Challenges

• The company faces competition for deposits and a volatile market environment.
• Integration risks associated with the Comerica acquisition remain, including the need to realize anticipated benefits and potential disruption to business.
• Specific charges included $171 million in merger-related charges, $26 million in interchange litigation matters, and $14 million in technology-related asset impairments.
• Year-to-date merger-related charges totaled approximately $1.04 billion.
• OREO (Other Real Estate Owned) included $74 million of branch-related real estate no longer intended for banking purposes, primarily driven by the Comerica acquisition.

Management Commentary and Tone

• Tim Spence, Chairman, CEO, and President, stated that the third quarter reflected the earnings power of the combined company.
• Management highlighted strong client and banker retention following the systems conversion with Comerica, completed less than a year after the acquisition announcement.
• The tone emphasized that the business is growing despite integration challenges, with improved adjusted ROTCE and efficiency ratio compared to the second quarter.
• Management expressed confidence in the company's flexibility regardless of the rate environment due to its deposit mix and borrower exposure.

Other Key Points

• The Comerica acquisition systems conversion was completed with strong client and banker retention.
• No common share repurchases were made during the quarter or year-to-date.
• Dividends on preferred stock were $38 million for the quarter, a 7% decrease from $41 million in the prior year quarter.
• The effective tax rate for the quarter was 21.8%.
• The loan-to-core deposit ratio improved to 76% from 77% in the prior quarter.
• Average wholesale funding decreased 10% sequentially to $23.252 billion, driven by reductions in long-term debt and FHLB advances.
• The company reported a 450 basis point positive operating leverage from the second quarter on an adjusted basis.