Fifth Third Bancorp (NASDAQ:FITB) used its fourth-quarter 2025 earnings call to highlight profitability metrics it described as “among the best of all banks” reporting so far, while outlining a detailed integration plan and 2026 financial outlook tied to its pending merger with Comerica.
Management said the quarter capped “a year of milestones,” pointing to branch expansion in the Southeast, continued digital investment, and growth in commercial payments and wealth management. Executives also said the company has received all material regulatory and shareholder approvals for the Comerica deal and expects to close the transaction on Feb. 1, with systems conversion anticipated around the end of the third quarter of 2026.
Quarterly results and profitability metrics
CFO Bryan Preston said adjusted return on assets of 1.41% was the company’s highest since 2022, while return on average tangible common equity excluding AOCI was 16.2%. He also said adjusted pre-provision and pre-tax earnings were over $1 billion, up 6% from the prior year. The bank returned $1.6 billion of capital to shareholders in 2025 and grew tangible book value per share (including AOCI) 21% year over year, Preston said.
On revenue, Spence said 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.
Balance sheet: NII, margin, loans, and deposits
Preston reported fourth-quarter net interest income of $1.5 billion, up 6% year over year, as net interest margin expanded 16 basis points to 3.13%. He attributed the performance to loan growth, proactive liability management, and repricing benefits on fixed-rate assets.
Average loans grew 5% year over year. Preston said commercial average loans grew 4%, and excluding CRE categories increased 5%. In middle market, the company continued adding relationship managers in high-growth markets, contributing to a 7% increase in average middle market loans. In small business, the bank extended Provide’s technology to all small business lending, which management said helped drive a $1 billion increase in balances over last year.
Management noted commercial balances were flat sequentially due to lower utilization. Preston said utilization declined alongside a government shutdown in October and November, stabilizing in December at 35% versus 36.7% in the third quarter, with corporate banking and CRE cited as primary drivers. Spence added that in the first couple of weeks of 2026, C&I loan balances had risen about $800 million to $900 million since Jan. 1, driven by utilization and fourth-quarter production funding.
On consumer lending, Preston said loans grew 6% on an average basis year over year, with auto and home equity lending up 11% and 16%, respectively, in 2025. He said the bank achieved the number two origination market share in HELOC within its footprint in the fourth quarter, up from number four in the prior year, crediting improved branch performance and digital engagement.
Average core deposits rose 1% year over year, driven by 4% DDA growth, Preston said, partially offset by slower growth in interest-bearing products as the bank managed funding costs. Interest-bearing deposit costs were 2.28% in the fourth quarter, down 40 basis points year over year, which Preston described as a 50% beta during 2025. The company cited a 3% sequential increase in average transaction deposits and a 14% sequential decline in wholesale funding as part of a mix shift aimed at lowering funding costs ahead of the Comerica integration.
Fees, expenses, and credit trends
Adjusted non-interest income (excluding security gains and other items listed in the release) grew 3% sequentially and year over year, Preston said. Key contributors included:
- Wealth fees: up 13% year over year, driven by $11 billion in AUM growth and strong retail brokerage activity.
- Capital markets: fees up 5% sequentially, reflecting seasonal strength in M&A advisory.
- Commercial payments: fees up 8% year over year and 6% sequentially, driven by core treasury management activity and Newline-related fees.
Preston said Newline-related deposits reached $4.3 billion, up $1.4 billion from a year ago. Spence said Newline revenues more than doubled compared to the fourth quarter of the prior year and noted that one in three commercial clients added in 2025 was a payments-only client with no credit extension.
On expenses, Preston pointed to several notable items in the quarter: a $50 million contribution to the Fifth Third Foundation, $13 million in merger-related expenses, and a $25 million benefit from an FDIC special assessment adjustment. Excluding those items, he said non-interest expense rose 4% year over year and 2% sequentially, reflecting ongoing investments in technology, branches, marketing, and sales personnel. Both executives reiterated that the bank’s “value streams” programs reached $200 million in annualized run-rate savings.
Credit metrics improved, management said. Net charge-offs were 40 basis points in the quarter, which Spence described as the lowest level in the past seven quarters. Preston said the net charge-off ratio improved 6 basis points year over year, while non-performing assets declined for a third consecutive quarter. The allowance for credit losses remained at 1.96% of portfolio loans and leases, and provision included a $6 million reduction, primarily due to a small decline in end-of-period loan balances.
Comerica integration timeline and 2026 outlook
Spence said the merger with Comerica has received overwhelming shareholder support and all material regulatory approvals, with closing expected Feb. 1. He described 2026 as a “busy year” focused on conversion and achieving $850 million in expense synergies, alongside more than $500 million in revenue synergies over five years across middle market scaling, wallet-share expansion, Texas retail buildout, and an “innovation banking” business combining Comerica’s tech and life sciences vertical with Fifth Third’s Newline platform.
Spence told analysts the bank expects to move systems conversion up to around Labor Day from a prior mid-October expectation. Preston said there were “no material changes” to transaction assumptions beyond timing, adding the company could potentially deliver somewhat more than the assumed 37.5% of annualized run-rate expense synergies in 2026, while also reinvesting in growth.
For 2026, Preston provided guidance based on a forward curve at the start of January that assumed 25-basis-point rate cuts in March and July. Key outlook items included:
- Net interest income: expected between $8.6 billion and $8.8 billion for the full year.
- NIM: expected to increase about 15 basis points upon close, driven by discount accretion, securities repositioning, hedge repositioning, and funding/mix benefits.
- Average total loans: expected in the “mid-$170 billion” range, primarily driven by broad-based improvement in C&I; utilization assumed relatively stable.
- Adjusted non-interest income: expected between $4.0 billion and $4.4 billion.
- Non-interest expense: expected between $7.0 billion and $7.3 billion, excluding CDI amortization and $1.3 billion of estimated acquisition-related charges.
- Net charge-offs: expected between 30 and 40 basis points, reflecting normalization and the addition of Comerica’s portfolio.
On capital, Preston said CET1 ended 2025 at 10.8%, up 20 basis points, reflecting capital generation and a pause in share repurchases until the Comerica close. Pro forma CET1 including AOCI impact was cited at 9.1%. Management said it expects CET1 post-close to remain near a 10.5% target and anticipates resuming regular quarterly share repurchases in the second half of 2026, depending on balance sheet growth, purchase accounting marks, and merger-related charges. The bank said it is not providing first-quarter guidance due to the merger’s impact and plans to provide its customary outlook in early March.
About Fifth Third Bancorp (NASDAQ:FITB)
Fifth Third Bancorp is a Cincinnati, Ohio–based bank holding company whose primary banking subsidiary operates as Fifth Third Bank. The company provides a broad range of financial services to individual consumers, small businesses, middle-market companies and large corporations. Its business mix includes retail and commercial banking, lending, payment and card services, treasury and cash management, and wealth management and investment advisory services delivered through a combination of branch locations, commercial offices and digital platforms.
On the consumer side, Fifth Third offers deposit accounts, consumer loans, mortgages, auto financing and credit card products, along with digital banking and mobile services.
