Fifth Third Bancorp Raises 2025 Outlook

Fifth Third Bancorp(NASDAQ:FITB) reported results for Q2 2025 on July 17, 2025, exceeding analysts' consensus expectations with adjusted (non-GAAP) EPS of $0.90, 6% adjusted revenue growth year over year, and 7% net interest income (NII) growth year over year. Management raised full-year NII and operating leverage guidance, announced that share repurchases will resume in Q3 2025, and emphasized resilience in both balance sheet positioning and strategic expansion in the Southeast.

Record Profitability Amidst Industry Headwinds

While regional banks broadly faced muted loan growth due to a soft housing market and uneven commercial demand, Fifth Third Bancorp's results were driven by strength across its commercial (C&I), CRE, leasing, mortgage, home equity, auto, and proprietary fintech channels. Its efficiency ratio improved to 55.5%, with tangible book value per share increasing 18% year over year and 5% sequentially, supported by prudent risk management and targeted investments.

"Our key profitability metrics continue to be very strong, and among the best of all peers who have reported thus far. Our adjusted return on assets was 1.2%. Our adjusted return on tangible common equity was 18%. And our efficiency ratio was 55.5%."
— Tim Spence, Chairman, CEO & President

Its consistently top-tier profitability and efficiency highlight a sustainable, well-diversified business model that reinforces long-term shareholder value regardless of macro uncertainties.

Southeast Expansion Accelerates Granular Growth

In the Southeast, 10 branches were opened in the first half of 2025, and 40 more are planned by year's end. Branches opened between 2022 and 2024 averaged over $25 million in deposits in their first year. The company is on pace to reach nearly 400 branches in the Southeast by year's end and has already secured approximately 80% of locations for an additional 200-branch buildout.

"Branches built between 2022 and 2024 are averaging over $25 million in deposit balances within the first 12 months after opening, significantly outpacing our original expectations. We remain on pace to open 50 branches this year, with 10 opened in the first half. We have now secured approximately 80% of the locations for the additional 200 Southeast branches that we announced in November."
— Bryan Preston, CFO

The strong deposit-gathering productivity of new Southeast branches supports strategic funding flexibility.

Innovative Payments and Tech Offerings Drive Fee Momentum

Fee income from Newline, the bank’s embedded payments business, increased 30% year over year, and new commercial deposits attached to Newline services grew by $1.1 billion year over year to $3.7 billion. J.D. Power recently ranked Fifth Third's mobile app No. 1 among regional banks for user satisfaction.

"Our embedded payments business, Newline, continued its strong growth with fees up 30%. Deposits attached to Newline services increased to $3.7 billion, up $1.1 billion compared to the year-ago period."
— Bryan Preston, CFO

Scaling digital and payments revenues through proprietary platforms and partnerships enhances fee income resiliency while growing low-cost, technology-driven commercial deposit relationships outside traditional branch channels.

Looking Ahead

Management raised its full-year NII growth guidance to 5.5% to 6.5%, and affirmed its expectations for record NII and 150 to 200 basis points of full-year positive operating leverage, even with no rate cuts or further loan growth. Average total loans are expected to be up 5% for the full year compared to 2024, driven by C&I and auto, with credit costs now projected in a tightened 43 to 47 basis point range for full-year net charge-offs. No specific M&A plans were outlined, and organic Southeast expansion remains the primary growth lever.

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